FM to launch RGESS in Mumbai next month

Scheme was announced in Budget 2012-13, provides tax benefits to first-time investors in stock markets

Aiming to attract first-time stock market investors, Finance Minister P Chidambaram will launch the much-awaited Rajiv Gandhi Equity Savings Scheme (RGESS) in Mumbai on February 9.

"He (Chidambaram) is going to Mumbai next month and will formally launch the Rajiv Gandhi Equity Scheme there," sources told PTI.

The RGESS, which was announced in the Budget for 2012-13, seeks to provide tax benefits to first-time investors in stock markets.

Under the scheme, an individual with an income of less than Rs 10 lakh would get tax incentives for investing up to Rs 50,000 in the stock market.

As per the notification issued by the Securities and Exchange Board of India (Sebi) on the RGESS, there would be a lock-in period of one year on investments made under the scheme.

For transactions undertaken by investors through their RGESS designated demat account, depositories would be required to seek necessary transactional details from stock exchanges for enforcing lock-in.

The mutual fund houses have already started lining up mutual fund schemes focused on the RGESS. Two state-owned fund houses SBI and IDBI and one private fund house DSP Blackrock have filed draft offer documents for such schemes with the market regulator Sebi, while others may soon follow suit.

The scheme was notified by the Department of Revenue, Finance Ministry on November 23 last year.