Section 80CCG allowed a resident individual who acquired listed equity shares or listed units of an equity oriented fund under a notified scheme a deduction of fifty per cent of the amount invested, up to twenty-five thousand rupees, for three consecutive assessment years beginning with the year of first acquisition. The assessee had to be a new retail investor as specified in the scheme, with gross total income not exceeding twelve lakh rupees, and the investment had to be locked in for three years.
Operative consequences
If a condition in sub-section (3) was not complied with in any previous year, the deduction originally allowed is deemed income of that previous year (s. 80CCG(4)).
Sub-section (5) bars any deduction for an assessment year commencing on or after 1 April 2018. Its proviso allowed an assessee who had claimed the deduction for assessment year 2017-18 or earlier to continue up to assessment year 2019-20.
Status
Expired. No deduction is allowable after assessment year 2019-20 under s. 80CCG(5). The section carries no bracketed note of omission. The Finance Act, 2026 does not amend s. 80CCG.
The Income-tax Act, 1961 governs assessment year 2026-27 and earlier years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, there is no corresponding provision.
Case Laws & Commentary
SECTION 80CCG — DEDUCTION IN RESPECT OF INVESTMENT MADE UNDER AN EQUITY SAVINGS SCHEME (RGESS)
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
STATUTORY SCHEME (editorial summary — verbatim bare-Act text in the companion Block-1 file)
Marginal heading: Deduction in respect of investment made under an equity savings scheme.
Section 80CCG allowed a resident individual, being a new retail investor whose gross total income did not exceed the specified limit, a deduction of 50 per cent of the amount invested in listed equity shares or listed units under the Rajiv Gandhi Equity Savings Scheme (RGESS), subject to a maximum deduction of Rs 25,000, for three consecutive assessment years, with a lock-in. The deduction was discontinued: no deduction is allowable from assessment year 2018-19, though an assessee who claimed it for an earlier year could continue for the balance of the three-year period subject to the original conditions.
A. SECTION COMMENTARY
A.1 Structural position
Section 80CCG was the Rajiv Gandhi Equity Savings Scheme deduction — a first-time-investor equity incentive with a lock-in. It has been sunset: no new claim is possible from assessment year 2018-19.
A.2 Provision taxonomy
A 50-per-cent-of-investment deduction, capped at Rs 25,000, for three consecutive years, for new retail investors below an income threshold, with a lock-in and a recapture on breach of the lock-in conditions.
A.3 Core doctrinal themes
No live interpretive controversy; the only residual issues concern the lock-in / recapture for legacy claims and the discontinuance from assessment year 2018-19.
A.4 Legislative evolution / FA amendment trail
Inserted by the Finance Act, 2012 (w.e.f. assessment year 2013-14). Discontinued by the Finance Act, 2017: no deduction from assessment year 2018-19, with a grandfathering for those already in the three-year cycle. Not amended by the Finance Act, 2026.
A.5 CA practitioner pointers
(1) No fresh claim is possible. (2) For grandfathered claimants, ensure the lock-in conditions were met to avoid recapture. (3) Do not confuse RGESS (80CCG) with ELSS (80C) — different schemes and lock-ins.
B. FA 2026 IMPACT NOTE
Section 80CCG is NOT amended by the Finance Act, 2026 and is discontinued from assessment year 2018-19 (subject to grandfathering).
Facts: The deduction was discontinued from assessment year 2018-19.
Issue: Whether any fresh claim or substantial controversy survives.
Held: No fresh claim is possible; legacy claims are governed by the lock-in / recapture conditions.
Ratio: Sunset incentive with grandfathering.
Relevance: Recorded for completeness; no reported interpretive case law is digested.
Editorial note on sourcing
Editorial scheme summary prepared from the Income-tax Act, 1961 as amended by the Finance Act, 2025, read with the Finance Act, 2026; verbatim bare-Act text is carried in the companion Block-1 treatise file. Case law is restricted to reported Supreme Court / High Court authority verified against standard law reports; where a deduction is substantiated by documentary proof and generates little appellate litigation, that is stated candidly and the governing administrative material is given instead of padded citations.
Function in the statutory architecture
Section 80CCG allowed a resident individual who acquired listed equity shares or listed units of an equity oriented fund under a notified scheme a deduction of fifty per cent of the amount invested, up to twenty-five thousand rupees, for three consecutive assessment years beginning with the year of first acquisition. The assessee had to be a new retail investor as specified in the scheme, with gross total income not exceeding twelve lakh rupees, and the investment had to be locked in for three years.
Operative consequences
Status
Expired. No deduction is allowable after assessment year 2019-20 under s. 80CCG(5). The section carries no bracketed note of omission. The Finance Act, 2026 does not amend s. 80CCG.
The Income-tax Act, 1961 governs assessment year 2026-27 and earlier years; the Income-tax Act, 2025 governs tax year 2026-27 onwards. For this subject, there is no corresponding provision.
Case Laws & Commentary
SECTION 80CCG — DEDUCTION IN RESPECT OF INVESTMENT MADE UNDER AN EQUITY SAVINGS SCHEME (RGESS)
Case Laws & Commentary (Income-tax Act, 1961 as amended by Finance Act, 2026)
STATUTORY SCHEME (editorial summary — verbatim bare-Act text in the companion Block-1 file)
Marginal heading: Deduction in respect of investment made under an equity savings scheme.
Section 80CCG allowed a resident individual, being a new retail investor whose gross total income did not exceed the specified limit, a deduction of 50 per cent of the amount invested in listed equity shares or listed units under the Rajiv Gandhi Equity Savings Scheme (RGESS), subject to a maximum deduction of Rs 25,000, for three consecutive assessment years, with a lock-in. The deduction was discontinued: no deduction is allowable from assessment year 2018-19, though an assessee who claimed it for an earlier year could continue for the balance of the three-year period subject to the original conditions.
A. SECTION COMMENTARY
A.1 Structural position
Section 80CCG was the Rajiv Gandhi Equity Savings Scheme deduction — a first-time-investor equity incentive with a lock-in. It has been sunset: no new claim is possible from assessment year 2018-19.
A.2 Provision taxonomy
A 50-per-cent-of-investment deduction, capped at Rs 25,000, for three consecutive years, for new retail investors below an income threshold, with a lock-in and a recapture on breach of the lock-in conditions.
A.3 Core doctrinal themes
No live interpretive controversy; the only residual issues concern the lock-in / recapture for legacy claims and the discontinuance from assessment year 2018-19.
A.4 Legislative evolution / FA amendment trail
Inserted by the Finance Act, 2012 (w.e.f. assessment year 2013-14). Discontinued by the Finance Act, 2017: no deduction from assessment year 2018-19, with a grandfathering for those already in the three-year cycle. Not amended by the Finance Act, 2026.
A.5 CA practitioner pointers
(1) No fresh claim is possible. (2) For grandfathered claimants, ensure the lock-in conditions were met to avoid recapture. (3) Do not confuse RGESS (80CCG) with ELSS (80C) — different schemes and lock-ins.
B. FA 2026 IMPACT NOTE
Section 80CCG is NOT amended by the Finance Act, 2026 and is discontinued from assessment year 2018-19 (subject to grandfathering).
C. CASE LAW — CLUSTERED BY ISSUE
Cluster C-1 : Sunset provision
Note on section 80CCG
Facts: The deduction was discontinued from assessment year 2018-19.
Issue: Whether any fresh claim or substantial controversy survives.
Held: No fresh claim is possible; legacy claims are governed by the lock-in / recapture conditions.
Ratio: Sunset incentive with grandfathering.
Relevance: Recorded for completeness; no reported interpretive case law is digested.
Editorial note on sourcing
Editorial scheme summary prepared from the Income-tax Act, 1961 as amended by the Finance Act, 2025, read with the Finance Act, 2026; verbatim bare-Act text is carried in the companion Block-1 treatise file. Case law is restricted to reported Supreme Court / High Court authority verified against standard law reports; where a deduction is substantiated by documentary proof and generates little appellate litigation, that is stated candidly and the governing administrative material is given instead of padded citations.