16 June 2012
Dear Mr. Reddy, It was announced in the Budget Speech for 2012-13 that a new scheme is proposed to encourage flow of savings in financial instruments and improve the depth of domestic capital market. Accordingly, a new clause has been introduced in the Finance Act, 2012 to insert a new section 80CCG in the Income-tax Act. The provision provides for a one-time deduction of 50 per cent of the amount invested in listed equities by a new retail investor, being a resident individual whose annual income is below Rs. 10 lakh. The aggregate deduction shall be subject to a limit of Rs. 25,000 (corresponding to an investment limit of Rs. 50,000) and the investment shall have a lock-in period of 3 years. The modalities of this provision shall be in accordance with a scheme to be notified by the Central Government in this behalf.
This amendment will take effect from 1st April, 2013 and will, accordingly, apply in relation to the assessment year 2013-14 and subsequent assessment years.
16 June 2012
The scheme regarding invesment in listed equities will be notified soon by the central government. A salaried employee can include the deduction available under this sectionin in the investment declaration filed by him to his employer.
CAclubindia
