A dozen fund houses ready to launch RGESS plans
Under the RGESS route, a new retail investor who has not transacted in equity share through his depository account as on November 23, 2012, and having a gross annual income not exceeding R10 lakh, would be eligible for tax savings under Section 80 CCG, which is over and above the R1 lakh limit available under Section 80 C of Income tax Act.
Market participants believe it is too early to gauge the kind of response the scheme will get, but a lot will depend on how individual fund houses work with distributors to sell the scheme.
That RGESS has a separate tax benefit and is earmarked as a separate tax instrument, which may work in its favour. However, experts believe the scheme is poorly structured in its current avatar, as investors stand to get a one-tme benefit of just R2,500 on an investment of R50,000 if they fall within the 10% tax slab, or R5,000 if they come under the 20% slab.
According to the Sebi circular detailing the scheme, units of exchange-traded funds (ETFs) or mutual fund (MF) schemes with eligible securities as underlying can be brought under the ambit of RGESS.
Eligible securities can fall in the list
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