38. Rationalization of deduction under section 80CCG.
38.1 Under the provisions of section 80CCG of the Income-tax Act, deduction for three consecutive assessment years is allowed up to Rs. 25,000 to a resident individual for investment made in listed equity shares or listed units of an equity oriented fund subject to fulfilment of certain conditions.
38.2 This deduction was introduced vide Finance Act, 2012. Considering the fact that only a limited number of individuals availed this deduction and also to rationalize the multiplicity of deductions available under Chapter VI-A of the Income-tax Act, section 80CCG has been amended to phase out this deduction by providing that no deduction under the said section shall be allowed from assessment year 2018-19. However, an assessee who has claimed deduction under this section for assessment year 2017-18 and earlier assessment years shall be allowed deduction under this section till the assessment year 2019-20 if he is otherwise eligible to claim the deduction as per the provisions of this section.
38.3 Applicability: This amendment takes effect from the 1st April, 2018 and will, accordingly, apply from assessment year 2018-19 and subsequent years.