TMI BlogUnder sub-section(1)of section 80CCG of the Income-tax Act, 1961 - Rajiv Gandhi Equity Savings Scheme, 2013X X X X Extracts X X X X X X X X Extracts X X X X ..... ective of the Scheme.- The objective of the Scheme is to encourage investment of savings of small investors in the domestic capital market. 3. Definitions. - In this Scheme, unless the context otherwise requires,- (i) Act means the Income-tax Act, 1961 (43 of 1961) ; (ii) demat account means an account opened with the depository participant in accordance with the guidelines laid down by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (iii) depository means a company as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (iv) depository participant means a participant as defined in clause (g) of sub- section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (v) eligible securities means any of the following, namely :- (a) equity shares, on the day of purchase, falling in the list of equity declared as BSE-100 or CNX-100 by the Bombay Stock Exchange or the National Stock Exchange, as the case may be; (b) equity shares of public sector enterprises which are categorised as Maharatna, Navratna or M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Scheme but defined in the Act shall have the meanings respectively assigned to them in the Act. 4. Eligibility .- The deduction under the Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to twelve lakh rupees. 5. Opening or designating of demat account.- A new retail investor shall - (a) open a new demat account or designate his existing demat account for the purpose of availing the benefit under this Scheme; (b) submit a declaration in Form A to the depository participant who shall forward the same to the depository for verifying the status of the new retail investor; (c) furnish his permanent account number(PAN) while opening the demat account or designating the existing account as a Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be. 6. Procedure for investment under the Scheme. - A new retail investor shall make investments under the Scheme in the following manner, namely:- (a) the new retail investor may invest in one or more financial years in a block of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iod of seven trading days from the end of the financial year so that the eligible securities purchased on the last trading day of the financial year also get credited in the demat account and such securities shall be deemed to have been acquired in the financial year itself; (k) the new retail investor can make investments in securities other than the eligible securities covered under the Scheme and such investments shall not be subject to the conditions of the Scheme nor shall they be counted for availing the benefit under the Scheme; (l) the deduction claimed shall be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is contravened by the new retail investor. 7. Period of holding and other conditions. - (1) The period of holding of eligible securities invested in each financial year shall be three years to be counted in the manner hereafter provided. (2) The eligible securities shall be held for a period called the fixed lock-in period which shall commence from the date of purchase of such securities in the relevant financial year and end on the 31st day of March of the year immediately followin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion in accordance with sub-section (1) of section 80CCG of the Act in that financial year; (b) the balance of the investment portfolio of eligible securities in the demat account, at any point of time during the flexible lock-in period, shall not be less than the amount corresponding to the value of the securities in the fixed lock-in. (6) The new retail investor s demat account created under the Scheme shall, on the expiry of the period of holding of the investment relevant to the last financial year for which the deduction has been claimed, be converted automatically into an ordinary demat account. (7) For the purpose of valuation of investment during the flexible lock-in period, the closing price as on the previous day of the date of trading shall be considered. (8) While making the initial investments upto fifty thousand rupees, the total cost of acquisition of eligible securities shall not include brokerage charges, securities transaction tax, stamp duty, service tax and any other tax, which may appear in the contract note. (9) Where the investment of the new retail investor undergoes a change as a result of involuntary corporate actions including demerger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 80CCG for the other assessment year shall be liable to tax; (ii) is not covered by sub-clause (i), the aggregate deduction allowed to the investor under section 80CCG for both the years shall be liable to tax. Explanation .-It is hereby clarified that in the case where the value of the investment portfolio of eligible securities is more than the corresponding value of such securities in respect of which deduction has been claimed in either of the two financial years, the deduction corresponding to the financial year in which the value of investment portfolio of eligible securities is less, shall be liable to tax. (3) Where the deduction in respect of any amount as referred to in sub- paragraphs (1) and (2) has been charged to tax, the value of the investment portfolio of eligible securities for the purposes of compliance under paragraph 7 for the remaining period of flexible lock-in shall be equal to or higher than the value of the eligible securities in respect of which the deduction was originally claimed as reduced by the value of eligible securities in respect of which the deduction has been charged to tax. 9. Duties of Depository, etc.- (1) The depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) I have demat account No._______ in_______ depository participant but I have not traded in any equity shares or derivatives in this account. (c) I have a joint demat account No. ______in_______depository participant but I am not the first account holder. 2. I hereby declare that I have read and understood all the terms and conditions of the Rajiv Gandhi Equity Savings Scheme. 3. It is hereby verified that I am an eligible new retail investor for availing the benefits under the Rajiv Gandhi Equity Savings Scheme. 4. I undertake to abide by all the requirements and fulfill all obligations under the Scheme, and will comply with all the terms and conditions of the Scheme. 5. I undertake to inform the Depository Participant when my gross total income exceeds twelve lakh rupees in any of the subsequent financial years for which the benefit under the Rajiv Gandhi Equity Savings Scheme is proposed to be availed of. 6. I understand that, in case I fail to comply with any condition specified in the Scheme, the benefits availed thereunder will be withdrawn and the tax shall be payable by me accordingly. Signature of the Investor Place: Date: * Tick which e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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