How to get Tax rebate through Rajiv Gandhi equity savings scheme

Rajiv Gandhi equity savings scheme is the best way for tax rebate and investment too. Right investment can provide easy way of savings to every individual. This is an opportunity for those investors to come in the market who have not yet invested through mutual funds or other means.

In order to fulfill future financial needs easily, every person should think about financial planning at a young age. On the other hand financial planning makes every person responsible regarding investment. So every individual should make investment strategy from the beginning of their young age, to get future benefits. Rajiv Gandhi equity savings scheme is the best way for saving. For more money back return, a person should invest in equity and mutual funds. The stock, diversified equity funds, sector equity funds and index funds are better choices for investment.

Reduce tax by Rajiv Gandhi equity savings scheme

RGESS is very beneficial for all those whose income is not more than Rs. 10 lakhs and are willing to reduce their tax or take benefit of tax deduction. But before proceeding further, let's understand in brief about this scheme and its working.

What is Rajiv Gandhi equity savings scheme (RGESS) and how it works

Rajiv Gandhi equity savings scheme is one of newly launched investment scheme in India. Rajiv Gandhi equity savings scheme was announced in last year's budget. Peoples whose yearly income is less than Rs. 10 lakhs can take more advantage of this scheme. Through Rajiv Gandhi saving scheme, tax rebate plus 1 -year lock- in period will be given to the investor on the investment of Rs 50,000 in the share market. By this scheme, new investors can also invest again in the share market to get the benefit of tax rebate.

First time this scheme is giving benefit of 50% tax debate on the investment of 50,000 Rs. whereas, investment limits may be reduced second time to get tax concession. Rajiv Gandhi equity saving scheme is considered to bring under section 80C. Separate discount is also given to the investor by this scheme.

Rajiv Gandhi equity scheme is a great step in the investment sector. It is an opportunity for those investors to come in the market who have not invested through mutual funds or other means. This step is not only good for Indian mutual fund industry but good for share market also. For tax saving, investors will feel excited to invest by mutual funds. By this scheme, the money will come in the market, which is lying useless in bank deposits and houses.

Investment through mutual funds is the best part for those investors who are investing first time in market; by this they can get fund managers write guidance. Through this scheme, new investors will gradually invest in mutual funds and this automatically benefits mutual fund industry. It is estimated that amount of 10,000-15,000 crore rupees can come in mutual fund industry in coming few years by this scheme.

Huge number of fund houses and new funds has be launched in the market after the arrival of RGESS. Investors should invest only after analyzing the performance of the fund house. Investment bonds and debt funds are the better choices. Government and many private companies are best bonds available in the market. Better returns can be earned by these types of investments. The PPF and bank deposits are also good options of real investment but both of them provide less money back returns.

It is a general rule that young investors can invest in the equity market. Because they have enough time take risk as well as chance to earn better returns. So ULIP's, Gold ETF's and Index Funds are attractive options for investment.

If the investor is 20 years of age, than he could easily take risk for higher returns. Investor should increase his investment limits and he should also invest some amount in equity market. In the case of any emergency investor should always keep about 3-6 times their monthly income share in the bank account. Thus it is necessary for a person to keep eye on every investment made by him. As there are limitations of every thing, so as of RGESS also has. It lacks in liquidity as there is one year blanket lock-in, and an overall lock-in of 3 years.

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