Section 80CCG of Income Tax

Newly inserted Section 80CCG provides deduction wef assessment year 2013-14 in respect of investment made under notified equity saving scheme. The deduction under this section is available if following conditions are satisfied:

(a) The assessee is a resident individual (may be ordinarily resident or not ordinarily resident) This scheme is not available to HUF.

(b) His gross total income does not exceed Rs. 10 lakhs;

(c) He has acquired listed shares in accordance with a notified scheme;

(d) The assessee is a new retail investor as specified in the above notified scheme;

(e) The investor is locked-in for a period of 3 years from the date of acquisition in accordance with the above scheme;

(f) The assessee satisfies any other condition as may be prescribed.

Amount of deduction –The amount of deduction is at 50% of amount invested in equity shares.
However, the amount of deduction under this provision cannot exceed Rs. 25,000. If any deduction is claimed by a taxpayer under this section in any year, he shall not be entitled to any deduction under this section for any subsequent year.

Withdrawal of deduction – If the assessee, after claiming the aforesaid deduction, fails to satisfy the above conditions, the deduction originally allowed shall be deemed to be the income of the assessee of the year in which default is committed.

After reading this proposal .Few doubts has been cleared but not all .Few point which needs clarification / details regarding actual implementation of the scheme.

This Article has been posted by CA Prahsnat Doshi. He can be reached at prashantdoshi22@gmail.com

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