As a first time investor and considering the tax benefits, should I invest in ELSS or RGESS? Will RGESS is defaulty applicable even if I opt for ELSS? If I invest today ₹30,000 in ELSS, will I get tax benefit for this year?
- Prasad
Investments in Equity Linked Savings Schemes (ELSSs) (or tax planing mutual funds) qualify for tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. Rajiv Gandhi Equity Savings Scheme (RGESS) is meant for investors who have never traded in stocks through a demat account. Investments in RGESS are capped at ₹50,000 per individual, with a tax deduction of 50 per cent on the amount invested. Both schemes have a lock-in period of three years. However, RGESS allows one to trade in investments after a year on certain conditions.
This article was originally published on January 08, 2016.
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