Rajiv Gandhi equity scheme norms to come by July end

New Delhi: The Finance Ministry is likely to come out with details of the Rajiv Gandhi equity scheme, which is aimed at boosting retail investments in capital market, by the last week of July.

“RGESS norms will come out by last week of July,” a senior finance ministry official said.

In order to encourage savings and improve investment in capital markets, former Finance Minister Pranab Mukherjee in 2012-13 Budget had announced Rajiv Gandhi Equity Scheme, under which 50 per cent tax deduction would be allowed to retail investors with annual income less than Rs 10 lakh, for investment up to Rs 50,000, with a lock-in period of 3 years.

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A retail investor can avail the scheme only once in a life time. This was the first-ever tax benefit scheme announced by the government to encourage retail investors participation in the equity market.

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By offering this scheme, the government aims at channelising household savings into stock markets.

To make the scheme more attractive for retail investors, the ministry is also considering reduction in the lock-in period under the scheme to one year from the proposed three years.

Recently, market regulator Sebi has asked the government to route tax-saving Rajiv Gandhi Equity Savings Scheme (RGESS) through MF to minimise risk associated with direct stock investment for new investors.

PTI