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Procedure for Investment

A new retail investor can make investments under the Scheme in the following manner:

  1. Open a demat account with a broker.

  2. An investor can invest in eligible securities in one or more transactions during the year in which the deduction has to be claimed.

  3. An investor can make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme will not exceed fifty thousand rupees.

  4. The eligible securities brought into the demat account, as declared or designated by the new retail investor, will automatically be subject to lock-in during its first year, unless the new retail investor specifies otherwise and for such specification, the new retail investor will submit a declaration in Form B indicating that such securities are not to be included within the above limit of investment. If the investment is made in the beginning months of a financial year, the inves tment may be locked in for more than three years. Since the i nvestor is given the flexibility (of no lock - in) for around 90 days in each of the flexible lock - in period, this extra lock - in period in the first year is sort of compensated for. The period of two years beginning immediately after the end of the fixed lock - in period shall be cal led the ‘Flexible Lock - in’ period.

  5. An investor will be eligible for a deduction under subsection (1) of section 80CCG of the Act in respect of the actual amount invested in eligible securities , in the first financial year in respect of which a declaration in Form B has not been made, subject to the maximum investment limit of fifty thousand rupees.

  6. An investor who has claimed a deduction under sub- section (1) of section 80CCG of the Act, in any assessment year, will not be allowed any deduction under the Scheme for any subsequent assessment year;

  7. An investor may also keep securities other than the eligible securities in the demat account through which benefits under the Scheme are availed.

  8. An investor can make investments in securities other than the eligible securities covered under the Scheme and such investments will not be subject to the conditions of the Scheme nor will they be counted for availing the benefit under the Scheme.

  9. The investment under the Scheme will consist of an investment in any of the eligible securities covered under the Scheme.

  10. Deductions claimed will be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated.