Rajiv Gandhi Equity Savings Scheme (RGESS) set for launch
RGESS (Rajiv Gandhi Equity Savings Scheme)
The finance ministry is set to notify the Rajiv Gandhi Equity Savings Scheme (RGESS).
- Finance Minister P Chidambaram had approved the RGESS on September 21, 2012.
- Implementation delayed due to the deliberations on inclusion of Mutual Funds (MF) in it. Thus, further consultations with the RBI, SEBI and the law ministry on the coverage of RGESS.
- It might be so that only MFs fitting in specific conditions would be allowed.
- Tax benefits for investing up to Rs 50,000 in the capital markets for first-time retail investors with an annual income of Rs 10 lakh.
- The scheme initially announced in Budget 2012 had allowed tax benefits for investments in stocks. Later, Exchange Traded Funds (ETFs) and MFs were included under its ambit.
- Open to retail investors who have opened demat accounts but have not made any transactions in equity or derivatives till the notification of the scheme.
- All those opening fresh accounts would also be eligible to participate in RGESS.
- Investments can be made in various installments during a year,
- Total lock-in period: 3 years, including an initial lock-in of one year in the stock/ETF/MF in which the money has been invested.
- Stocks listed under BSE 100 or CNX 100 or those of PSUs which are Navratnas, Maharatnas and Miniratnas would be eligible.
- Investment in follow-on offers of these companies would also be eligible for tax deduction.