NEW DELHI: The government on Friday allowed first-time investors in top shares, equity mutual funds and exchange traded funds to avail of tax breaks in a move aimed at encouraging individuals to move from gold and real estate to financial assets and also expand the investor base.In the last budget, the government had announced the sops for investment in stocks but while notifying the rules, had extended the benefit to mutual funds and ETFs.The announcement may please the middle-class, which is now increasingly looking at new investment options. Besides, it may offset the negative perception generated by the sharp increase in diesel price and the cap on subsidized cooking gas cylinders."It will act as an alternative financial instrument and encourage more people to invest in this instrument rather than gold, which is a dead instrument," finance minister P Chidambaram told reporters.The flip side is that you can only claim the benefit once. "It's a one-time deduction," a partner at consulting firm Ernst & Young said.So, from Monday, those who have a PAN and a demat account with no trades so far will be able to avail of the benefit provided that their taxable income is up to Rs 10 lakh. In addition, the maximum permitted investment is Rs 50,000 a year, and a 50% deduction available under the Income Tax Act will translate into a net gain of Rs 25,000 for someone who makes full use of the Rajiv Gandhi Equity Savings Scheme.There are, however, a few riders. One, the investment has to be in the top 100 stocks on the Bombay Stock Exchange or the National Stock Exchange. In addition, it could be in one of the top public sector companies - Maharatnas, Navratnas and Miniratnas which are not part of the BSE 100 or CNX 100. Even PSUs with a turnover of under Rs 4,000 crore that are getting listed would be eligible, a move aimed at generating more interest in disinvestment. In case of mutual funds and ETFs, the investment pattern of the scheme has to be in these stocks.Two, there is a three-year lock-in for those availing of the tax breaks. In fact, investors would not even be allowed to trade in the first year and in the remaining two years have to maintain the level of investment.The announcement went down well with market players. "This is an excellent initiative by the government to encourage small investors to participate in the capital markets. The penetration of investment in equities is very low in India, this initiative will help overcome this," said Sanjiv Shah, co-CEO at Goldman Sachs Asset Management (India).