Rajiv Gandhi Equity Savings Scheme, 2012 (RGESS)
January 27, 2013 2 Comments
To encourage the flow of savings of small investors into the domestic capital market, the Government of India announced a scheme named Rajiv Gandhi Equity Savings Scheme, 2012 (RGESS) in the last budget.Also a new section 80 CCG under the Income Tax Act, 1961 on ‘Deduction in respect of investment under an equity savings scheme’ was introduced to give tax benefits to “New Retail Investors”who invest up to `50,000 in ‘Eligible Securities’ and have a gross total annual income less than or equal to Rs.10 Lakhs.
A ‘New Retail Investor’ for the purposes of this scheme is defined as is any Resident Individual
- who has not opened a demat account and has not made any transactions in the equity or derivative segment as on the date of notification of the scheme i.e., November 23, 2012. OR
- who has opened a demat account as a first holder, but has not transacted in the equity or derivate segment till November 23, 2012.OR
- who has a demat account as a joint holder.
If you ever hear a spiel that goes something like this:Staying invested in the market for the long term ,through various cycles ensures that investors get rich.Unfortunately at the first sign of trouble most mutual investors run.Then the fund house has redemption problems and long term investors like you pay for the weakness of these short term investors.But if you go for XYZ scheme,there is a lock-in of n years so no matter what happens investors can’t flee easily,so ABC wise fund manager can work his magic and give you extraordinary returns.And BTW this fund is now floating its NFO.If you delay you can’t benefit from this good scheme for n more years-Be skeptical.Very skeptical.This salesperson might just stick you into a dud investment you can’t exit easily. 
wealthymatters 