Download Rajiv Gandhi Equity Scheme

 Rajiv
Gandhi Equity Savings Scheme has been
launched with the objective of encouraging
savings of small investors in the domestic
capital market

Anybody who has not invested in equities before
and has a gross total annual income of Rs10 lakh
or less.

Which means, you have not opened a demat
account in the past.

You have not made any transactions in equity
and derivatives in the past (until November 23,
2012.)

a new demat account as the 1st holder and
invest in RGESS.
 If
you do have a demat account but have not
done equity or futures and options
transaction in the past (until November 23,
2012), you can invest in RGESS.
 If
you are a joint demat account holder (2nd
or 3rd account holder), you can open
 You
can make any amount of investments,
but the amount eligible for an income tax
deduction is a maximum amount of Rs
50,000.
 To
invest in RGESS, you will need to open a
demat account. You will also have to fill in
declaration Form A to the Depositary
Participant (DP)
 There
is a lock-in period of total three years.
This lock-in period is further divided into two
– fixed and flexible
 Fixed
Lock-in: The first one year from the
date of investment is a fixed lock-in. During
this period, you cannot sell any securities or
pledge them to get loans.
 Flexible
Lock-in: The flexible lock-in period
is for next two years from the date of the
end of the fixed lock-in period. During this
period, you are permitted to buy and sell
eligible securities, provided that for a
cumulative period of 270 days each year, you
are maintaining the value of your initial
investment. In short, the value of the
investment portfolio should be equal to or
more than the amount you’ve claimed as
investments for the purpose of deduction
under Section 80 CCG
 As
a retail investor, you can either invest a
lumpsum or in parts (in one financial year).
The treatment as to how the lock-in period
works will really depend on the type of
investment option, you’ve chosen
 Option
1: You’ve made a lumpsum
investment in RGESS
 Option 2 : Here’s how the lock-in-period will
work of your investments are bought in
instalments.
 Once
the period of holding expires, the
demat account will be converted
automatically into an ordinary demat
account.

You will get a deduction for investment up
to Rs50,000. As per the Indian Income tax, a
deduction is up to 50 percent of the amount
invested in such equity shares to the extent
such deduction does not exceed Rs 25,000.
So, if you are in the lowest tax bracket of 10
percent your tax benefit will be Rs 2,500.
And, if you are in the 20 percent tax bracket,
your tax benefit will be Rs 5,000.