- Rajiv Gandhi Equity Scheme
Rajiv Gandhi Equity Saving Scheme to allow for income tax deduction of 50% to new retail investors (whose annual income is below Rs 10 lakh), who invest upto Rs 50,000 directly in equities.
Objective of RGESS:
To encourage flow of savings of small investors in domestic capital market.
Key Highlights of RGESS
- Investment in eligible securities up to Rs.50,000/- will get 50% deduction of the amount invested.
- Tax payers in 10% and 20% only are eligible.
- Maximum tax benefit up to Rs.5,150/-.
- This is over and above deductions for investment made U/s 80-C.
Eligible Investors for RGESS
- Gross total annual income less than Rs.10 lacs.
- Who has not opened a Demat account till 23/11/2012.
- Who has opened a Demat account but has not transacted in the Equity or derivative segment till 23/11/2012.
- Who has a Demat account but only as a joint holder
Rajiv Gandhi Equity Savings Scheme - Eligible Securities
- Equity Shares of Companies included in
- Eligible Securities
- CNX 100 & BSE 100
- PSU Maharatna, Navratna & Miniratna
- Any FPO of above mentioned securities
- ETFs & MFs with RGESS eligible securities as underlying.
- NFOs of eligible Mutual Funds Scheme
- IPO of eligible PSU's
RGESS - Procedures & formalities
- Open a Demat account by fulfilling all KYC formalities along with a declaration in prescribed format.
- Can also designate existing Demat account by providing the declaration to that effect
Mode of investing
- Can buy eligible securities from secondary market.
- Can invest in eligible MF schemes by providing Demat account details in the application form for receiving credit.
- Can invest in eligible IPOs / NFOs by providing Demat account details for receiving credit
Mutual Funds Offering RGESS
| Mutual Fund houses have lined up exclusive schemes that would invest in RGESS eligible securities. By investing in them, investors will be eligible for additional tax benefit apart. | |
| DSP BR RGESS Series 1 | A 3 year close ended Equity Fund. |
| IDBI RGESS Series 1 Plan A | A 3 year close ended Equity Fund. |
| SBI Sensex ETF | An Exchange Traded Fund tracking BSE Sensex. |
| UTI RGESS Fund | A 3 year close ended Index Fund tracking Nifty. |
Final Conclusion : Should you invest in RGES
RGES is good for tax payer whose total Income is less then Rs 10 lac.
Please invest in RGES only if you have used limit of Rs 1 lac as per Section 80C.
For more details visit: RGES
