New Delhi, Sept. 21: The Rajiv Gandhi Equity Saving Scheme, designed to offer tax benefits of up to 50 per cent of the investment to first-time investors, aims at widening the retail base of the domestic bourses, finance minister P. Chidambaram said today.
The scheme, which was promised in this year’s budget and will be notified within a fortnight, is meant for first time investors earning up to Rs 10 lakh a year and purchasing equities up to Rs 50,000. “It will help to channelise household savings to productive instruments and away from gold,” Chidambaram said. Demand from India and China has driven gold prices to a record high.
Investments in BSE100 and CNX100 stocks besides initial and follow-on offerings of blue-chip public sector firms with an annual turnover of over Rs 4,000 crore for at least three consecutive years come under the scheme.
Mutual funds and equity traded funds that invest in the eligible listed securities will also fall under the purview of the scheme, a press note issued by the finance ministry said.
Officials said the government would use PAN cards to verify eligibility.
Investments in the scheme will have a three-year lock-in, but individuals will be allowed to trade in securities after the first year.