Finance Minister P. Chidambaram has said that the Rajiv Gandhi Equity Savings Scheme will be revisited to make its provisions more retail investor-friendly.
Speaking at the launch of the RGESS Schemes, the Finance Minister said that the scheme was too complex for the small investor to understand and that complying would be difficult.
“Initially, the tax incentive on the Rs 50,000 investment was not considered to be adequate. We expect to include a large number of demat holders who have not undertaken any derivative trades of late. RGESS is expected to channelise savings into financial instruments and bring in first-time investors,” he said.
The necessary changes will be announced in the forthcoming Budget, he said.
Fund Houses launch scheme
“We have to take a re-look at the scheme from the point of view of further modifying it, so as to make it more sustainable and more beneficial in the long run for the same class of middle income investors,” said SEBI Chief U. K. Sinha who was also present at the event.
At the event, the Finance Minister inaugurated the logo of the RGESS. Five fund houses launched their schemes on the occasion – SBI, UTI, DSP Blackrock, IDBI and LIC Nomura.
RGESS is an initiative by the Government to encourage first-time investors to invest in equity instruments.
Investors with an income of Rs 10 lakh and below are eligible for these schemes.
A maximum investment of Rs 50,000 is eligible for tax incentives in the first year of investment.
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