The deduction under the Scheme will 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.

The deduction under the Scheme shall be available to a new retail investor who:-

• Is a resident individual (the benefit cannot be availed by HUF, corporate entities / trusts etc).
• Has not opened a Demat account and has also not done any trading in the derivative segment till RGESS account opening date or the first day of the “initial year” in which he brings in the RGESS eligible investment into the account, whichever is later.
• Has opened a Demat account and has not made any transactions in equity and /or in the derivative segment till designating such account as RGESS or the first day of the “initial year” in which he brings in the RGESS eligible investment into the account, whichever is later.
• In case the demat account is opened as a first holder, but there are no transactions in the equity or derivative segment, then the first account holder is eligible to be a new retail investor.
• For taking the benefits under RGESS, the new retail investor will have to submit a declaration, as in Form ‘A’, to the Depository Participant (DP) at the time of account opening or designating his existing demat account.
• In case of joint accounts, only the first account holder will not be considered as a new retail investor. All those existing account holders other than the first demat account holder (eg. second / third account holders or other joint holders) or nominees of the existing account holders will be considered as new retail investors for the purpose of opening of a fresh RGESS account, if otherwise eligible.
• Has gross total income for the financial year less than or equal to 12 Lakh (INR).

• RGESS eligible securities(BSE)
• RGESS eligible securities(NSE)

A new retail investor can make investments under the Scheme in the following manner:

• Open a demat account with a Depository Participant by providing an undertaking Revised link (Form A) that he wishes to designate his existing account or open a new account as RGESS account.
• An investor can invest in eligible securities in one or more transactions during the year in which the deduction has to be claimed.
• An investor can make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme will not exceed fifty thousand rupees.
• The eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during that year, unless the new retail investor specifies otherwise and for such specification, the new retail investor will submit a declaration in Revised link Form B / Application indicating that such securities are not to be included within the above limit of investment.
• An investor will be eligible for a deduction under subsection (1) of section 80CCG of the Act in respect of the actual amount invested in eligible securities, in the first financial year in respect of which a declaration in Revised link Form B / Application has not been made, subject to the maximum investment limit of fifty thousand rupees.
• The investor would get under Section 80CCG of the Income Tax Act, a 50% deduction of the amount invested during the year, upto a maximum investment of 50,000 (INR) per financial year, from his/her taxable income for that year, for three consecutive assessment years.
• An investor will be permitted a grace period 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 will be deemed to have been purchased in the financial year itself.
• An investor may also keep securities other than the eligible securities in the demat account through which benefits under the Scheme are availed.
• An investor can make investments in securities other than the eligible securities covered under the Scheme and such investments will not be subject to the conditions of the Scheme nor will they be counted for availing the benefit under the Scheme.
• The investment under the Scheme will consist of an investment in any of the eligible securities covered under the Scheme.
• Deductions claimed will be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated.

• RGESS FAQ

• Ministry of Finance Notification on RGESS - 2013
• Ministry of Finance Notification on RGESS - 2012

• SEBI circular on RGESS
• CDSL Communiques on RGESS
• Declaration form related to RGESS (Form A)
• Declaration form related to RGESS (Form B)
• General Application on RGESS

As on:  May 31, 2020

• View new retail investor certificate