Tax deduction under section 80CCG


Is there a limit on the maximum possible tax exemption under section 80CCG?


To answer your question yes there is a maximum possible limit as you can avail a possible deduction of Rs. 25,000 under section 80CCG. The deductions are available provided you fulfill the basic conditions. Firstly your gross total income should be less than Rs. 10 Lakhs and you secondly you should be a first time investor under the Rajiv Gandhi Equity Savings Scheme.


Hi Dhyan,

The Section 80CCG or Rajiv Gandhi Equity Savings Scheme deduction was launched by the Government to encourage investments in equity shares. Under this section, you can avail a tax deduction of up to 50% of the amount you have invested in equity shares or Rs. 25,000, whichever is lower.

RGESS investments have a lock-in. The fixed lock-in period is one year while the flexible lock-in is two years after the fixed lock-in. Under the fixed lock-in, you can’t sell or pledge your RGESS investments.

Under the RGESS, you can invest in eligible stocks, Mutual Funds and ETFs to get tax benefits. In the equity segment, you can invest in shares listed on CNX 100, BSE 100, and stocks of PSUs.

After the 2017 Union Budget announcement, it is clear now that deductions under Section 80CCG won’t be allowed for the assessment year 2018-19. Investors who have already taken positions under the RGESS scheme shall be allowed to get the benefit of deduction till the assessment year 2019-20, provided that such investors opt to receive the deduction till that period.

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BB Expert