2. *
*Rajiv Gandhi Equity Saving Scheme (RGESS) is a new
initiative by the government of India aimed at
encouraging first time investors to channelize
their savings into the capital markets.
*As an incentive, a one time deduction will be
available to the new retail investor on the 50% of
the amount invested in ‘eligible securities’ in the
financial year, subject to maximum investment limit
of Rs 50,000.
*For the purpose of claiming benefit under RGESS,
the investor needs to invest in select approved
securities as notified by the government.
4. *
* It provides additional tax benefits over and above the
present tax savings schemes under the Income Tax Act.
* Gains, arising of investments in RGESS, can be realized after
a year. This is in contrast to all other tax saving instruments.
* Investments are allowed to be made in instalments in the
year in which the tax claims are filed.
* Dividend payments are tax free.
* This scheme has a long run benefit of educating the retail
investment segment and thereby moving towards financial
inclusivity in the country.
* Success of this scheme can lead to transfer of assets from
traditional savings instruments such as bank deposits and FDs
to the capital markets, leading to diversification in retail
investor portfolio and also leading to more productive
"capital formation" assets.
6. *
Equity Shares in BSE-100 or
CNX-100
Equity Shares Of Maharatna,
Navratna and Miniratna
Units Of Eligible ETFs and
MFs
Eligible FPOs & NFOs and
IPOs of PSUs.
7. *
*BHARAT HEAVY ELECTRICALS LTD.
*COAL INDIA LTD.
*GAIL (INDIA) LTD.
*INDIAN OIL CORP.LTD.
*NTPC LTD.
*OIL & NATURAL GAS CORP.LTD.
*STEEL AUTHORITY OF INDIA LTD.
Source: Department of Public Enterprises (as on Feb,
2013)
8. *
* BHARAT ELECTRONICS LTD.
* BHARAT PETROLEUM CORP.LTD.
* HINDUSTAN AERONAUTICS LTD.
* HINDUSTAN PETROLEUM CORP.LTD.
* MAHANAGAR TELEPHONE NIGAM LTD.
* NATIONAL ALUMINIUM CO.LTD.
* NEYVELI LIGNITE CORP.LTD.
* NMDC LTD.
* OIL INDIA LTD.
* POWER FINANCE CORP.LTD.
* POWER GRID CORP.OF INDIA LTD.
* RASHTRIYA ISPAT NIGAM LTD.
* RURAL ELECTRIFICATION CORP.LTD.
* SHIPPING CORP.OF INDIA LTD.,THE
Source: Department of Public Enterprises (as on Feb, 2013)
12. *
The lock-In period of the scheme is for three(3) years.
There are two types of Lock-In for RGESS
*Fixed Lock-In:
The fixed Lock in period is for one (1) years i.e. from
the date of investment into the scheme.
*Flexible Lock-In:
The flexible Lock-In is for next two (2) years of the
scheme.
13.
14. *
In flexible Lock-In, the investor is permitted to trade subject to being
compliant for minimum 270 days in each flexible lock in year.
Compliant Conditions:
* Maintenance of value of RGESS portfolio => amount claimed as invested
* If there is fall in the RGESS portfolio due to market fluctuations without
any sale, then you are a compliant
Fall in the value Due to Sale:
* Should be compliant till the date of sale
* After the sale:
RGESS portfolio = Amt claimed as RGESS investment
OR
RGESS portfolio= Value of RGESS portfolio before sale
(whichever is lesser)
15.
16.
17. *
*While there is no restriction on investment, only Rs
50,000 is considered for tax purposes. Of this, only
50%, or Rs 25,000, is allowed as deduction.
*Since RGESS is for people with income less than Rs
10 lakh, they will fall in the 10% or 20% tax bracket.
The maximum tax savings under this will be Rs
5,000 for people in the 20% tax bracket and Rs
2,500 for those under 10% (beyond the Section
80C benefits).
*Besides, the tax savings are only for the first year,
not subsequent years. So, those who don't have
enough money or time to invest Rs 50,000 in 2012-
13 should consider postponing it to 2013-14
