Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

!"# "ntroduction to Rajiv Gandhi Equity Savings Scheme, 20 2

# $hat is the %ur%ose o& Rajiv Gandhi Equity Savings Scheme, 20 2 !RGESS#' With an objective to encourage flow of savings of the small investors in domestic capital market, the Government of India announced a scheme named Rajiv Gandhi Equity avings cheme, !"#! (RGESS). 2# $hat (ene&its does RGESS o&&er to small investors' $nder RGE , a new section %"&&G has been introduced in the Income 'a( )ct, #*+# on

Deduction in respect of investment under an equity savings scheme to offer ta( benefits to ,-ew Retail Investors. whose gross total income is less than or equal to Rs/#" 0akhs and who wish to invest up to Rs/1",""" in ,Eligible ecurities./ )# $ho is a *+e, Retail "nvestor-' ,-ew Retail Investor. means any resident Individual who has2 opened no demat account and done no transaction in the derivative segment as on the date of notification of the scheme i/e/, -ovember !3, !"#! .R opened a demat account 4as a , ole56irst 7older.8 but done no transaction in the equity or derivate segment till -ovember !3, !"#! .R opened a joint demat account 4not as a ,6irst 7older.8 and done no transaction in the derivative segment till -ovember !3, !"#! /# $hich are the *Eligi(le Securities- under the scheme' 9i: Equity shares of selected companies which includes2 a/ &ompanies falling in the list of ,&-;<#"". of - E or ,= E<#"". of = E

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

b/ >ublic sector enterprises categori?ed as @aharatna, -avratna or @iniratna by the &entral Government 9ii: $nits of E(change 'raded 6unds 9E'6s: and @utual 6und 9@6: schemes which are RGE compliant eligible stocks 5 E'6s 5 @6 schemes is available on the website of - E

0ist of RGE

!,,,0nseindia0com# A = E !,,,0(seindia0com)

!""# 1a2 (ene&its &or ne, retail investors investing in RGESS

3# $hat is the ma2imum amount that you may invest under RGESS &or availing ta2 (ene&its' Bou may invest any amount up to Rs/1",""" in eligible securities to be held in your demat account designated for RGE for availing ta( benefits/

4# 5an you invest more than Rs030,000 and claim ta2 (ene&it under RGESS' Bou may invest any amount in a demat account designated under RGE under the cheme can be claimed only on investment up to Rs/ 1","""/ 6# $hat ,ill (e the (asis &or valuation o& initial investment made under RGESS &or availing ta2 (ene&it' Caluation of investments 9up to Rs/1",""": for availing ta( benefits under RGE will be but the benefit

based on the cost of acquisition of eligible securities e(cluding brokerage charges, ecurities 'ransaction 'a(, stamp duty, service ta( and all ta(es which are appearing in the contract note issued by the stock broker/ 7# 8o, much ta2 (ene&it ,ill " avail under RGESS' $nder RGE , you are eligible to claim deduction of 1"D on the amount invested in eligible

securities from your ta(able income for the financial year in which such investment is made/

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

0et us say, you invest Rs/1",""" under RGE ta(able income will be Rs/!1,"""/ , the amount eligible for deduction from your , the

imilarly, if you invest Rs/E",""" under RGE

amount eligible for deduction from your ta(able income will be Rs/!","""/

9# "s this deduction under RGESS over and a(ove the limit o& Rs0 ,00,000 currently availa(le under Section 705 o& "ncome 1a2 Act ' Bes/ 'he deduction of Rs/!1,""" 9provided you invest Rs/1",""" under RGE under ection %"&&G for RGE available under ection %"& of Income 'a( )ct/ : offered

is in addition to the deduction of Rs/#,"",""" currently

!"""#

:ode o& o%ening a demat account and holding eligi(le securities under RGESS

0# 8o, to o%en RGESS demat account ,ith ;e%ository <artici%ant !;<#' Bou may approach any F> to open a demat account under RGE /

# $hat are the &ormalities that " need to &ul&il to o%en demat account' Bou are required to fulfil the GB& norms prescribed by E=I by submitting proof of identity, proof of address, copy of >)- card, etc/ to the F> with whom you wish to open a demat account along with a declaration in prescribed format 9i/e/, *Form A-: for availing RGE benefits/ 2# 5an " designate an e2isting demat account under RGESS' Bes, provided you are eligible as a ,new retail investor. under RGE e(isting demat account under RGE 9i/e/, *Form A-: to your F>/ / 'o designate your

you need to submit a declaration in prescribed format

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

)# $here ,ill " get *Form A-' Bou can get *Form A- from your F>/ /# 5an " designate or o%en more than one demat account &or RGESS' -o/ Bou can have only one demat account under RGE &F 0:/ 3# $hat ,ill (e the mode o& holding eligi(le securities' 'he mode of holding eligible securities under RGE will be in a ,Femat account./ across depositories 9i/e/, - F0 5

4# 5an " hold other securities i0e0, other than eligi(le securities in my demat account designated &or RGESS' Bes/ Hther securities 9viz. equity shares de!entures !onds mutua" fund units etc. : can be held in the demat account designated for RGE /

!"=#

:ode o& investing in RGESS

6# 8o, to make RGESS eligi(le investments' Hpen a new demat account with any F> and designate it under RGE your e(isting demat account under RGE Bou may approach any / or designate

E=I registered stock broker for making investment in any

eligible securities from the secondary market/ In case you are investing in mutual funds through any distributor, you need to simply provide your demat account details like Femat )ccount -umber and F> IF for receiving credit of the mutual fund units into the demat account/

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

6or investing in any I>H5-6H of the eligible securities, you can subscribe for the same and provide your demat account details like Femat )ccount -umber and F> IF for receiving credit of the eligible securities into the demat account/

!=# 8olding o& investments under RGESS

7# $hat is the holding %eriod &or investments made under RGESS' Investment holding period under RGE is of three years which includes ,6i(ed 0ock<in. of one year and ,6le(ible lock<in. of two years/ E2am%le> 0et us say, you have purchased eligible securities worth Rs/ 1",""" in a RGE designated demat account on Fecember 3#, !"#!/ 'he eligible securities will be in ,6i(ed lock<in. till Fecember 3", !"#3 and for fle(ible lock<in till Fecember 3", !"#1/ In case you intend to sell investment made under RGE within three years, it can be done

only after completion of *Fi2ed ?ock@in- period, subject to certain conditions/

!="#

Fi2ed ?ock@in %eriod under RGESS

9# $hat is *Fi2ed ?ock@in- %eriod' ,6i(ed 0ock<in. period shall commence from the date of purchase of first set of eligible securities in the relevant financial year and end one year from the date of purchase of the last set of eligible securities 9in the same financial year:/ E2am%le> If you have purchased first set of eligible securities worth Rs/ !",""" on Fecember !1, !"#! and ne(t set of eligible securities worth Rs/ !",""" on Fecember 3#, !"#! in a RGE designated demat account, then the ,6i(ed lock<in. period for both set of eligible securities will start from Fecember !1, !"#! and will end on Fecember 3", !"#3/

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

20# 8o, ,ill the eligi(le securities (e locked@in' 5an " invest in eligi(le securities into the same account and not su(ject such investments &or RGESS lock@in' 'he eligible securities brought into the demat account will be automatically locked<in subject to investment limit of Rs/1","""5< 7owever, if you do not want certain securities credited to your demat account to be considered for the RGE , then a declaration in the prescribed format 9i/e/ *Form A-: should be submitted to the F> within a period of one month from the date of the transaction/

2 # 5an " sell eligi(le securities declared &or RGESS during *Fi2ed ?ock@in- %eriod' -o/ Bou are not allowed to sell, pledge or hypothecate eligible securities during ,6i(ed 0ock< in. period/ 22# 5an " claim ta2 deduction in res%ect o& amount invested in eligi(le securities ,hich are s%eci&ied in Form A' -o/

!=""#

Fle2i(le ?ock@in %eriod under RGESS

2)# $hat is *Fle2i(le ?ock@in- %eriod' 'he period of two years beginning immediately after the end of the fi(ed lock<in period shall be called the ,6le(ible 0ock<in. period/ Furing ,6le(ible lock<in. period, you can sell eligible securities held in your demat account and remain eligible to claim ta( benefit under RGE are as follows2 , subject to certain conditions which

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

): In case you sell eligible securities during ,6le(ible lock<in. period and value of investment portfolio held under RGE within ,6le(ible lock<in. period remain equal to or higher than the amount claimed as investment for the purpose of deduction under section %"&&G of I' )ct, for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the fle(ible lock<in period .R =: In case value of investment portfolio held under RGE within ,6le(ible lock<in. period for a

fall due to fall in the market rate of eligible securities and you sell eligible securities during ,6le(ible lock<in. period, then value of investment portfolio under RGE years of the fle(ible lock<in period should be equal to or higher than2 i: 'he amount claimed as investment for the purpose of deduction under section %"&&G of the I' )ct .R ii: 'he value of investment portfolio held under RGE ,hichever is lo,er0 before such sell cumulative period of a minimum of two hundred and seventy days during each of the two

!="""# :iscellaneous
2/# $hat ,ill ha%%en to my demat account at the end o& &le2i(le lock@in %eriod' Bour demat account designated for RGE will be converted into a regular or ordinary

demat account at the end of the fle(ible lock<in period/

23# $hat ,ill ha%%en in case " &ail to com%ly ,ith any condition s%eci&ied in the scheme'

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Frequently Asked Questions on Rajiv Gandhi Equity Savings Scheme, 20 2

'he deduction availed under the scheme will be added back to your ta(able income for the financial year in which you have failed to comply with any condition specified under RGE and you shall be liable to ta( as per the provisions of the Income 'a( )ct, #*+#/ <<<<<<<<<<<<<<<<<((((<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<((((<<<<<<<<<<<<<<<<<<<<<<<<<<<<((((<<<<<<<<<<<<<<<<<<<<<<<<<<<<<<
Disc"aimer# $hi"e utmost care has !een e%ercised &hi"e deve"oping the '()s *ationa" Securities Depository +td. does not &arrant the comp"eteness or accuracy of the information and disc"aims a"" "ia!i"ities "osses and damages arising out of the use of this information. ,articipants are requested to refer to the re"evant circu"ar(s) issued !y SE-./ *SD+ from time to time.

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