Can I invest ₹50000 every year in Rajiv Gandhi Equity Savings Scheme to claim the ₹25000 tax exemption for every financial year? My plan is to invest ₹50000 in 2014-15 and claim 50% (i.e. ₹25,000) and again invest a similar sum in 2015-16 and claim the amount. Can I do this?
Yes, you can claim tax benefits of ₹25,000 for three consecutive financial years for investments in RGESS.
However, do note that you should be a first time investor in equities (new demat account or demat account without any transactions) and should have an annual income of ₹12 lakh or less to be eligible for the scheme. The Rajiv Gandhi Equity Savings Scheme or RGESS grants tax exemptions to new investors for 50 per cent of the amount invested in certain eligible securities for three financial years. The maximum limit for annual investment is ₹50,000. Do note that if your income crosses the ₹12 lakh limit in any of the three years, you cannot claim tax benefits for that year.