A dozen fund houses ready to launch RGESS plans
two months ago, it is laudable that a good number of fund houses have been able to get the necessary approvals from the AMC and trustee, prepare offer documents, tweak existing products and filing offer documents for new schemes,” said Himanshu Pandya, VP & head, products, ICICI Prudential Asset Management.
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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