TaxTMI 
TaxTMI 
Rajiv Gandhi Equity Savings Scheme, 2012
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....t Companies (AMCs), Trustee Companies and Boards of Trustees of Mutual Funds are directed to take note of the notification and take necessary steps to implement the scheme. AMCs / Trustees shall ensure that RGESS eligible Exchange Traded Funds (ETFs) and Mutual Funds (MFs) schemes are in compliance with the aforementioned notification. 4. With regard to implementation of the MoF notification, the following is clarified: (i) For RGESS eligible close-ended Mutual Funds schemes, advice given by AMCs to the depository for extinguishment of units of close-ended schemes upon maturity of the scheme shall be considered as settled through depository mechanism and therefore RGESS compliant. (ii) AMCs shall disclose that the concerned RGESS eligible Exchange Traded Funds and Mutual Fund schemes is in compliance with the provisions of RGESS guidelines notified by Ministry of Finance vide notification no. 51/2012 F. No. 142/35/2012-TPL dated November 23, 2012, in Scheme Information Document (SID), in case of new fund offer, or by way of addendum, in case of existing RGESS eligible Exchange Traded Funds and Mutual Fund schemes. (iii) Section 6(c) of the notification....
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....n their website 8. This circular is being issued in exercise of the powers conferred by Section 11 (1) of Securities and Exchange Board of India Act, 1992, Section 19 of the Depositories Act, 1996 and the Regulation 77 of SEBI (Mutual Funds) Regulations, 1996 to protect the interest of investors in securities and to promote the development of, and to regulate, the securities market. Yours faithfully, Maninder Cheema Deputy General Manager [email protected] Enclosures: (i) Annexure A - Treatment of corporate actions (ii) Annexure B - Illustration of lock-in period in RGESS (iii) MoF notification No. 51/2012 F.No.142/35/2012-TPL dated November 23, 2012 Annexure A Treatment of corporate actions (i) Involuntary corporate actions: In case of corporate actions where investors has no choice in the matter, for example: demerger of companies, etc, the compliance status of RGESS demat account shall not change. (ii) Voluntary corporate actions: In case of corporate actions where investors has the option to exercise his choice and thereby result in debit of securities, for example: buy-back, etc, the same shall be considered as a s....
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....der sub-section (1) of section 80CCG of the Income-tax Act, 1961. 2. Objective of Scheme.-The objective of the Scheme is to encourage the savings of the small investors in domestic capital market. 3. Definitions.- In this Scheme, unless the context otherwise requires,- (i) "Act" means the Income-tax Act, 1961 (43 of 1961); (ii) "demat account" means an account opened with the depository participant in accordance with the guidelines laid down by the Securities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992); (iii) "depository" means a company as defined in clause (e) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (iv) "depository participant" means a participant as defined in clause (g) of sub-section (1) of section 2 of the Depositories Act, 1996 (22 of 1996); (v) "eligible securities" means any of the following :- (a) equity shares, on the day of purchase, falling in the list of equity declared as "BSE-100" or " CNX-100" by the Bombay Stock Exchange and the National Stock Exchange, as the case may be; (b) equity shares of public sec....
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....retail investor shall follow the following procedure at the time of opening or designating a demat account :- (a) the new retail investor shall open a new demat account or designate his existing demat account for the purpose of availing the benefit under the Scheme; (b) the new retail investor shall submit a declaration in Form A to the depository participant who will forward the same to the depository for verifying the status of the new retail investor; (c) the new retail investor shall furnish his Permanent Account Number (PAN) while opening the demat account or designating the existing account as a Rajiv Gandhi Equity Savings Scheme eligible account, as the case may be. 6. Procedure for investment under Scheme.- A new retail investor shall make investments under the Scheme in the following manner :- (a) the new retail investor may make investment in eligible securities in one or more than one transactions during the year in which the deduction has to be claimed; (b) the new retail investor may make any amount of investment in the demat account but the amount eligible for deduction, under the Scheme shall not exceed fifty thousand r....
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....years to be counted in the manner detailed hereunder. (2) All eligible securities are required to be held for a period called the fixed lock-in period which shall commence from the date of purchase of such securities in the relevant financial year and end one year from the date of purchase of the last set of eligible securities (in the same financial year) on which deduction is claimed under the Scheme. (3) The new retail investor shall not be permitted to sell, pledge or hypothecate any eligible security during the fixed lock-in period. (4) The period of two years beginning immediately after the end of the fixed lock-in period shall be called the flexible lock-in period. (5) The new retail investor shall be permitted to trade the eligible securities after the completion of the fixed lock-in period subject to the following conditions:- (a) the new retail investor shall ensure that the demat account under the Scheme is compliant for a cumulative period of a minimum of two hundred and seventy days during each of the two years of the flexible lock-in period as laid down hereunder:- (A) the demat account shall be considered complian....
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....ities and Exchange Board of India established under section 3 of the Securities and Exchange Board of India Act, 1992 (15 of 1992) shall notify the corporate actions, referred to in sub-paragraph (9), allowed under the Scheme in this regard. 8. If the new retail investor fails to fulfil any of the provisions of the Scheme, the deduction originally allowed to him under sub-section (1) of section 80CCG of the Act for any previous year, shall be deemed to be the income of the assessee of such previous year and shall be liable to tax for the assessment year relevant to such previous year. 9. (1) The depository shall certify the new retail investor status of the assessee at the time of designating his demat account as demat account for the purpose of the Scheme. (2) The depository participant shall furnish an annual statement of the eligible securities invested in or traded through the demat account to the demat account holder. 10. The depository shall provide a consolidated statement of details in the electronic format, as specified in Form C, on all the Rajiv Gandhi Equity Savings Scheme beneficiaries to the Director General of Income Tax (Systems) or any other person auth....
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.... (a) (b) (c) (d) (e) purchased in the aforesaid demat account on ______________are not to be included as investment for the purpose of the Rajiv Gandhi Equity Savings Scheme. Signature Name of the Investor: (first holder) Address of the investor: Permanent Account Number (PAN): Form C [See paragraphs 10 and 11] Annual report to be submitted by the depository to the Income Tax Department in Electronic Format before 30th April. (For 80 CCG benefits of Financial Year 2012-13) 2012-13 Report to be furnished by 30th April 2013 2013-14 Report to be furnished by 30th April 2014 2014-15 Report to be furnished by 30th April 2015 2015-16 Report to be furnished by 30th April 2016 Name PAN DEMAT A/c No. Date of opening A/c Date of investment for the Purpose of lock-in (date of making the last investment in RGESS# eligible scrip) Amount of Investment Scrips locked in RGESS# Whether A/c eligible under the RGESS# Scheme Whether A/c compliant with RGESS# with....