Scheme in a Glance
RGESS is a new tax saving scheme introduced to invest only in selected Equity Stocks, Mutual Funds and ETF’s. The
scheme is designed exclusively for the first time retail individual investors.
Reason to pay attention
- Tax benefit- Investments up to Rs 50,000 in scheme selected stocks are
eligible for tax benefit under section 80 CCG.
- High returns- The stock market has given considerable returns over the
year. For example, in the last 10 years, from December 2002 to December 2012,
Nifty has increased over 4.5 times.
- Stable- Scheme makes you invest only in top
notch companies of their respective sectors which minimizes the risk of fraud & volatility related to penny stocks.
Can You Apply?
- Yes, if your total annual income is less than Rs. 12 Lakh.
- Yes, if you have not made any transactions in equity or
derivatives before November 23,2012.
Interested….How to Apply?
- Need to open Demat Account through a Depository Participant.
- If you already have a Demat account where you haven’t traded, then get that account designated as RGESS account.
Conditions Apply
- The investment made under RGESS is locked-in for
a total period of three years.However only the first year is a fixed lock-in. In the
subsequent two years, the investment is
subject to a flexible lock-in. During the flexible lock-in period the investor
has freedom to book profit or alter the securities in her/his portfolio
provided the value of securities in the Demat account is maintained equal to
the amount declared as investment under RGESS in the first year.
- You can make investment only in
scheme eligible securities. Click here for updated Eligible List of Securities.
Fayda Recommendation
Faydabook always emphasizes on long term savings.
Any scheme that provides opportunity to make you investment in top notch
companies of their respective sector is surely in Investor’s benefit. Just have a
look on table given below:
| Scrip Name | Closing Rate as on 1st March 2003 (INR) | Closing Rate as on 1st March 2013 (INR) | Return (x Times) |
| HCL TECHNOLOGIES LTD. | 170.95 | 722.2 | 4.22 |
| ICICI BANK LTD. | 149.8 | 1,056.35 | 7.05 |
| HERO MOTOCORP LTD. | 225.1 | 1,646.05 | 7.31 |
| BHARTI AIRTEL LTD. | 27 | 310.65 | 11.51 |
| Axis Bank | 44.3 | 1,361.20 | 30.73 |
More FAQ’s
How do I invest in eligible securities of RGESS?
- Open a
designated RGESS demat account with any of the Depository Participant.
- Open a
trading account with any of SEBI registered Broker.
- To
invest in Mutual Fund, provide designated RGESS Demat Account details to get
credit of Mutual Fund Units
- For investing in any
IPO/NFO of the eligible securities, provide your Demat Account number for
receiving credit of the eligible securities into the demat account.
Can I designate or open more than one demat account for RGESS?
No. You can have only one demat
account across depositories for RGESS.
Can I use an existing demat account for RGESS?
Yes. You should submit a declaration in ‘Form A’ duly signed by the Account holder(s) for designating the Demat account for RGESS.
I have invested in Equity Mutual Funds/ ETFs but not in stocks or
derivatives. Do I qualify for RGESS?
Yes, any prior investments in
Mutual Funds and/or ETF’s does not make an investor ineligible for the Scheme.
I possess some physical shares. Am I eligible under RGESS?
Yes, You will be considered as a
new retail investor; but you need to make fresh investments to avail of the
benefits under RGESS.
I had equity holdings earlier but do not have any holding
in my Demat account. Am I eligible under RGESS?
No. Tax benefit under RGESS is
currently available to “new retail investors” who have not made any
transactions in the equity segment or the derivative segment till designating
such account as RGESS.
How do I avail Tax Benefit under RGESS?
The “new retail investor
certificate” will be issued to you by the concerned DP once you open the designated RGESS Demat account. You are required
to indicate these details in the Income Tax Returns filed by you, to avail of
the tax benefit.
Is there any lock-in for RGESS investments?
Yes, there is a lock-in period
of 3 years for investments made under RGESS.
First year is Fixed lock in period
where you are not permitted to sell / pledge / hypothecate your securities. Subsequent
two years will be Flexible lock-in
period and In this period you are permitted to trade in eligible securities.
Is tax deduction under RGESS over and above limit
of Rs.1,00,000 currently available under Section 80C of Income Tax Act?
Yes. You can avail Rs.1, 00,000 under Section 80C
of Income Tax Act and Rs.25,000 for maximum investment of Rs.50,000 under 80CCG.
Courtesy
http://www.nseindia.com
http://www.bseindia.com
