The investor would get 50% deduction of the amount invested during the year, upto a maximum investment of Rs.50,000 per financial year, from his/her taxable income for that year, for three consecutive assessment years.
- It provides additional tax benefits over and above the present tax savings schemes under the Income Tax Act.
<li>Gains, arising of investments in RGESS, can be realized after a year. This is in contrast to all other tax saving instruments.</li>
<li>Investments are allowed to be made in installments in the year in which the tax claims are filed.</li>
<li>The benefits can be availed for three consecutive years.</li>
<li>Dividend payments are tax free.</li>
<li>This scheme has a long run benefit of educating the retail investment segment and thereby moving towards financial inclusivity in the country.</li>
<li>Success of this scheme can lead to transfer of assets from traditional savings instruments such as bank deposits and FDs to the capital markets, leading to diversification in retail investor portfolio and also leading to more productive "capital formation" assets.</li>