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Rajiv Gandhi Equity Savings Scheme

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View our presentation to know all about investing in the Rajiv Gandhi Equity Savings Scheme.

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Rajiv Gandhi Equity Savings Scheme

  1. 1. Rajiv Gandhi Equity Savings Scheme
  2. 2. Introduction RGESS(Rajiv Gandhi Equity Savings Scheme)
  3. 3. Overview • New Tax advantage Equity scheme aimed at first time retail investors with annual income of up to Rs 10 lakhs • Tax Benefit - Deduction u/s 80 CCG, is available on 50% of the amount invested. The benefit is in addition to deduction available u/s Sec 80C • Maximum amount that can be invested is Rs 50,000. Maximum deduction available is 50% of Rs 50,000 i.e. Rs 25,000 • Lock in period of 3 years – Fixed Lock in during the first year and flexible lock in for subsequent two years
  4. 4. Eligibility Interested customers need to submit RGESS FORM A to apply for the scheme and confirm their eligibility The eligibility criteria is • If your annual income is less than or equal to Rs.10,00,000/• If you have never traded in the Equity or Derivatives segment • If you have never opened a Demat A/c • If you’re an existing Demat A/c holder but have not made any transaction in the Equity or Derivative Segment
  5. 5. List Of Eligible Securities • Stocks that are part of ‘CNX-100’ (by NSE) or ‘BSE-100’ (by BSE) • Equity shares of public sector enterprises that are categorized as • Maharatna, Navratna or Miniratna • Units of Exchange-Traded Funds (ETFs)* or Mutual Fund schemes* * List of Mutual Fund Schemes and ETFs would be declared on an ongoing basis as and when the notification of the fund or ETF’s eligibility is received.
  6. 6. Product Features • First Rs 50,000 worth of stock would be automatically locked for one year by NSDL (unless RGESS Form B given within one month of trade) • Shares to be locked for a year from the last trade in RGESS list • One multiple against Cash margin • Depository shall furnish an annual statement of the eligible securities invested in or traded through the Demat account to the Demat account holder. • After the completion of fixed lock in period, there is no imposed lock in and it will be client’s responsibility to keep the value of the investment portfolio of eligible securities equal to or more than the amount claimed as investment for the purposes of deduction for a minimum of 270 days in the subsequent 2 years of flexible lock in period’
  7. 7. Fixed Lock-in Period Fixed Lock-in • Shall commence from the date of purchase of first set of eligible securities in the relevant financial year and end one year from the date of purchase of the last set of eligible securities (in the same financial year). Trade Date (settlement start date) Value of Securities 23/12/2012 Lock in period till 30,000.00 03/03/2014 04/03/2013 20,000.00
  8. 8. Flexible Lock-in Period Flexible Lock-in • The period of two years beginning immediately after the end of the fixed lock-in period shall be called the ‘Flexible Lock-in’ period • During ‘Flexible lock-in’ period, you can sell eligible securities held in your Demat account, subject to certain conditions which are mentioned in the following slide
  9. 9. Different Scenarios - Lock-in Period Case A – If the value of Initial investment is HIGHER in year 2 • In case you sell eligible securities during ‘Flexible lock-in’ period and value of investment portfolio held under RGESS within ‘Flexible lock-in’ period remain equal to or higher than the amount claimed as investment for the purpose of deduction under section 80CCG of IT Act, for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the flexible lock-in period • In short – You can sell the shares provided the value of holding remains the same as the amount invested in year one on which you’ve claimed the tax benefit • Example – If you've invested Rs 30,000 in year one, and if the value appreciates to Rs 50,000, you may sell up to Rs 20,000 in year 2
  10. 10. Different Scenarios - Lock-in Period Case B – If the value of Initial investment is LOWER in year 2 • In case value of investment portfolio held under RGESS within ‘Flexible lock-in’ period fall due to fall in the market rate of eligible securities and you sell eligible securities during ‘Flexible lock-in’ period, then value of investment portfolio under RGESS for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the flexible lock-in period should be equal to or higher than: • The amount claimed as investment for the purpose of deduction under section 80CCG of the IT Act OR • The value of investment portfolio held under RGESS before such sell whichever is lower. Example given in the next slide
  11. 11. Different Scenarios - Lock-in Period • Case B – Example - Value of Initial Investment in year 1 is Rs 40,000 Value of Investment in year 2 falls to Rs 30,000 If customers sells securities worth Rs 20,000, the value of investment in year 2 for a period of 270 days cumulative should be Rs 30,000
  12. 12. Thank You • READ MORE Twitter Website Facebook
  13. 13. Contact Us For more details, please visit our website on http://www.kotaksecurities.com or call us on 1800 209 9191 You may also write to us on service.securities@kotak.com Kotak Securities Limited, Registered Address: 27 BKC, C 27, G Block, Bandra Kurla Complex, Bandra (E) Mumbai 400 051. SEBI Reg No: NSE INB/INF/INE 230808130, BSE INB 010808153/INF 011133230, OTC Reg. No. INB 200808136,MCXSX INE 260808130, NSDL: IN-DP-NSDL-23-97. CDSL: IN-DPCDSL-158-2001. Investment in securities market are subject to market risk, please read the combined risk disclosure document prior to investing. AMFI No: ARN 0164. Mutual Fund Investments are subject to market risks, please read the offer document carefully prior to investing. Kotak Securities Limited is a distributor of Mutual Funds and IPOs. Kindly note that investments in IPOs and Mutual Funds are made on the basis of the POA executed at the time of registration. Derivatives are a sophisticated investment device. The investor is requested to take into consideration all the risk factors before actually trading in derivative contracts. Compliance Officer Details: Mr. Sandeep Chordia. Call: 022 6605 6825, or Email: ks.compliance@kotak.com

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