notification 94 date of issue 18/12/2013 notification 94 date of issue 18/12/2013

[TO BE PUBLISHED IN PART II, SECTION 3, SUB-SECTION (ii) OF THE GAZETTE OF INDIA, EXTRAORDINARY, DATED THE 18.12.2013] Government of India Ministry of Finance Department of Revenue Notification New Delhi, the 18th December, 2013. (Income-tax) S.O. _3693 (E).— In exercise of the powers conferred by sub-section (1) of section 80CCG of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:- 1. Short title, commencement and application. - (1) This Scheme may be called the Rajiv Gandhi Equity Savings Scheme, 2013. (2) It shall come into force on the date of its publication in the Official Gazette. (3) This Scheme shall apply for claiming deduction in the computation of total income of the assessment year relevant to a previous year beginning on or after the 1st day of April, 2013 on account of investment in eligible securities under sub-section (1) of section 80CCG of the Income-tax Act, 1961(43 of 1961). 2. Objective of the Scheme.-The objective of the Scheme is to encourage investment of savings of small investors in the domestic capital market. 3. Definitions. - In this Scheme, unless the context otherwise requires,- (i) “Act” means the Income-tax Act, 1961 (43 of 1961); (ii) “demat account” means an account opened with the depository participant in accordance with the guidelines laid down by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (iii) “depository” means a company as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (iv) “depository participant” means a participant as defined in clause (g) of sub- section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (v) “eligible securities” means any of the following, namely :- (a)   equity shares, on the day of purchase, falling in the list of equity declared as “BSE-100” or “ CNX-100” by the Bombay Stock Exchange or the National Stock Exchange, as the case may be; (b) equity shares of public sector enterprises which are categorised as Maharatna, Navratna or Miniratna by the Central Government; (c) Units of Exchange Traded Funds or Mutual Fund schemes or equity oriented funds, which have eligible securities specified in sub-clause (a) or sub-clause (b) as underlying securities, provided they are listed and traded on a stock exchange and settled through a depository mechanism; (d) Follow on Public Offer of sub-clauses (a) and (b); (e) New Fund Offers of sub-clause (c); (f) Initial Public Offer of a public sector undertaking wherein the Government shareholding is at least fifty-one per cent. which is scheduled for getting listed in the relevant previous year and whose annual turnover is not less than four thousand crore rupees during each of the preceding three years; (vi) “financial year” means a year commencing on the 1st day of April and ending on the 31 stday of March; (vii) “Form” means the Form appended to the Scheme; (viii) “initial year” means- (a) the financial year in which the investor designates his demat account as Rajiv Gandhi Equity Savings Scheme account and makes investment in the eligible securities for availing deduction under the Scheme; or (b) the financial year in which the investor makes investment in eligible securities for availing deduction under the Scheme for the first time, if the investor does not make any investment in eligible securities in the financial year in which the account is so designated; (ix) “investment” means investment by an assessee in any of the eligible securities in accordance with the Scheme; (x) “new retail investor” means a resident individual,- (a) who has not opened a demat account and has not made any transactions in the derivative segment before the date of opening of a demat account or the first day of the initial year, whichever is later: Provided that an individual who is not the first account holder of an existing joint demat account shall be deemed to have not opened a demat account for the purposes of this Scheme; or (b) who has opened a demat account but has not made any transactions in the equity segment or the derivative segment before the date he designates his existing demat account for the purpose of availing the benefit under the Scheme or the first day of the initial year, whichever is later; (xi) “Scheme” means the Rajiv Gandhi Equity Savings Scheme; (xii) words and expressions used and not defined in this Scheme but defined in the Act shall have the meanings respectively assigned to them in the Act. 4. Eligibility .- The deduction under the Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to twelve lakh rupees. 5. Opening or designating of demat account.- A new retail investor shall - (a) open a new demat account or designate his existing demat account for the purpose of availing the benefit under this Scheme; (b) submit a declaration in Form A to the depository participant who shall forward the same to the depository for verifying the status of the new retail investor; (c) furnish his permanent account number(PAN) while opening the demat account or designating the existing account as a Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be. 6. Procedure for investment under the Scheme. - A new retail investor shall make investments under the Scheme in the following manner, namely:- (a) the new retail investor may invest in one or more financial years in a block of three consecutive financial years beginning with the initial year; (b) the new retail investor may make investment in eligible securities in one or more than one transaction during any financial year during the three consecutive financial years beginning with the initial year in which the deduction has to be claimed; (c) the new retail investor may make any amount of investment in the demat account but the amount eligible for deduction under the Scheme shall not exceed fifty thousand rupees in a financial year; (d) the new retail investor shall be eligible for the tax benefit under the Scheme only for three consecutive financial years beginning with the initial year, in respect of the investment made in each financial year; (e) if the new retail investor does not invest in any financial year following the initial year, he may invest in the subsequent financial year, within the three consecutive financial years beginning with the initial year, in accordance with the Scheme; (f) the eligible securities brought into the demat account, as declared or designated by the new retail investor shall be under a lock-in for a period of three years in accordance with the provisions of paragraph 7; (g) the eligible securities brought into the demat account, in respect of which the assessee is eligible for deduction under the Scheme, shall be under a fixed lock-in during the first year, as per the provisions of the paragraph 7, unless the new retail investor specifies otherwise, and for such specification, the new retail investor shall submit a declaration in Form B, either in electronic or physical form, to the depository participant indicating that such securities are not to be included within the above limit of investment;