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Equity Linked Savings Scheme vs Rajiv Gandhi Equity Savings Scheme

Difference between Equity Linked Savings Scheme and Rajiv Gandhi Equity Savings Scheme

Basis of DifferenceEquity Linked Savings Scheme (ELSS) Rajiv Gandhi Equity Savings Scheme (RGESS)
TypeMutual Funds
Vs
Mutual Funds, directly in listed
securities declared as "BSE-100" or "
CNX-100" or the PSU shares categorised
as Maharatna, Navratna or Miniratna by
the Central Government or in Exchange
Traded Funds (ETFs)
ObjectiveTo avail tax rebate under sec 80C of
Income Tax on deposits with capital
appreciation on investment
Vs
To avail tax rebate under sec 80CCG of
Income Tax on deposits with the stated
objective of "encouraging the savings of
the small investors in the domestic
capital markets"
MeaningInvesment of fund is made in diversified
equity funds for long term which
generates capital appreciation
Vs
It is exclusively for the first time
retail investors in securities market
that provides additional tax benefits
over and above the tax savings schemes
under section 80C of Income Tax Act
EligibilitySalaried employee, self-employed,
businessman, professional or any other
person can invest in it
Vs
Gives tax benefits to first time retail
investors in securities market who
invest up to Rs. 50,000 and whose annual
income is below Rs. 12 lakh and can only
be availed for 3 consecutive years
Suitable forYoung investor who can take risk and aim
for a higher return (usually 15% p.a. or
more)
Vs
First time retail investors in
securities market who can take risk and
wants tax rebate over and above the tax
savings schemes under section 80C of
Income Tax Act
Investible amountAny amount. Minimum subscription amount
is declared by the fund house
Vs
Any amount. Minimum subscription amount
is declared by the fund house
Maximum Investment AmountNo limit, however, the section 80C limit
(Rs. 1.5 Lakh p.a.) will be applicable
for claiming rebate
Vs
No limit. however, the section 80CCG
limit (Rs. 25,000 p.a.) will be
applicable for claiming rebate
Interest RatesMarket driven returns, one can expect
15% returns over a longer term period
Vs
Market driven returns, one can expect 12
to 15% returns over a longer term period
Interest Rates
Compounding
N.A.
Vs
Annually
Interest earned is
taxable
No
Vs
No
LiquidityNo
Vs
No
Tenure/ Lock-in Period3 Years
Vs
3 Years, however trading is allowed
after 1 year with certian conditions
Income Tax Rebate Yes, upto Rs 1,50,000/- p.a. u/s 80C
Vs
Yes, a person can claim 50% of
investment amount which can be maximum
upto Rs 25,000 p.a. u/s 80CCG
MaturityTax Free
Vs
Tax Free
Premature WithdrawalsNot allowed
Vs
Not allowed
LoansNo
Vs
No
Tax Deduction at SourceNo
Vs
No
RiskVolatile and risky iInvestment in short
term
Vs
Volatile and risky