Is RGESS an alternative to ELSS?

No, RGESS is not a substitute for ELSS. If you are in the higher income brackets but your income is less than Rs 10 lakhs you can make use of both RGESS and ELSS. You can go for elss and then rgess after the entire benefit under elss has been utilized.

Rgess has many limitations compared to elss. Firstly you need to be a first time user of demat account for rgess having income less than Rs 10 lakhs. This automatically restricts rgess to a one-time benefit scheme. Secondly you can invest a maximum of Rs 1 lac and claim deduction under section 80 C elss whereas rgess gives a maximum deduction of Rs 50,000 under section 80 CCG. Thirdly only 50% of the invested amount is eligible for deduction under rgess while elss gives 100% deduction on invested amount.

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