I had purchased eligible shares under Rajiv Gandhi Equity Savings Scheme (RGESS) worth over ₹50,000. But only shares worth ₹49,000 is locked in. What should I do? How do I claim a deduction under RGESS?
- Himanshu Gautam
Your question is a bit confusing. Are you saying that your depository didn't lock-in all the shares you have purchased under RGESS? Are you sure all those shares you bought were eligible under RGESS. If yes, please check with the depository participant why it hasn't locked in your shares worth ₹50,000.
You can invest any amount in a demat account designated under RGESS, but the benefit under the scheme can be claimed only on investment up to ₹. 50,000 in a single financial year. The depository automatically lock-in all the eligible securities which comes into an RGESS designated demat account during the relevant financial year (over and above what is required for meeting the flexible lock-in requirements) up to a value of ₹50,000. However, you have the freedom to select the stocks to be kept under lock-in up to ₹50,000 for claiming benefits under RGESS. You should intimate the depository participant through Form B within one month from the date of transaction, about which investments you do not want to keep as part of RGESS in that year. This will give you the right to sell / pledge those securities at any time. Once an application is made through Form B, that particular security cannot be brought back under RGESS while claiming for tax benefit. In subsequent years of flexible lock-in period, if that stock is still an eligible security under RGESS provisions, it will be counted towards valuation of RGESS portfolio irrespective of its status as an "eligible security" while claiming the benefits.
This article was originally published on February 08, 2016.
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