Sunday, December 2, 2012

Income Tax :- Savings /Deduction > 1,00,000 u/s 80CCG

Friends,  Income Tax Department has notified new Notification Dated 23.11.2012 regarding Rajiv Gandhi Equity Savings Scheme, 2012.   Earlier benefit of investment in infrastructure bond was taken by an Individual etc. But now w.e.f.. A.Y. 2013-14 or Financial Year 2012-13,  deduction in investment in Infrastructure bond has been stopped and a new deduction u/s 80CCG as investment in Rajiv Gandhi Equity Savings Scheme 2012 has been started. 

                The benefit of this scheme can bet availed under some conditions. 
1. 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  ten lakh rupees.

2. Procedure at time of opening demat account.-The new retail investor shall  follow the following procedure at the time of opening or designating a demat account  :- 

    (a) the new retail investor  shall open a new demat account or designate his existing demat account for the purpose of availing  the benefit under the Scheme; 
   (b)  the new retail investor shall submit a declaration in Form A to the  depository participant  who will forward the same to the depository for  verifying the status of the new retail investor; 
   (c) the new retail investor shall 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.
3) Procedure for investment under Scheme.-  A new retail investor shall make  investments under the Scheme in the following manner :- 

               (a) the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed;  
               (b) the new retail investor may make any amount of investment in the demat account but the amount  eligible for deduction, under the Scheme shall not exceed  fifty thousand rupees; 
                    (c) 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 its first year, as per the provisions of paragraph 7, unless the new retail investor specifies otherwise and for such specification, the new retail  investor shall submit a declaration in Form B indicating that such securities  are not to be included within the above limit of investment; 
                (d) the new retail investor shall 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 Form B has not been made, subject to the maximum  investment limit of fifty thousand rupees;
                    (e)  the new retail investor who has claimed a deduction under sub- section (1) of section 80CCG of the Act, in any assessment  year, shall not be allowed any deduction under the Scheme for any subsequent assessment year;  
                       (f) the new retail investor shall be permitted a  grace period of three 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 purchased in the financial year itself; 
                      (g) the new retail investor may  also keep securities other than the eligible securities covered under the Scheme in the demat account through which benefits under the Scheme are availed;  
                        (h) 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; 
                (i) the investment under the Scheme shall consist of all eligible securities covered under the Scheme that are initially bought by the investor under the Scheme or that are bought subsequently by the investor as per the provisions of the Scheme; 
                    (j) 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 violated. 

To read complete Notification No. 51 dated 23.11.2012 (Click Here)

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