In a major boost for MF industry, Rajiv Gandhi Equity Savings Scheme (RGESS) is all set to allow investment through mutual funds to get tax benefit. There will be certain conditions attached to that. The Finance Ministry is in the process of notifying the scheme. With the new conditions now introduced, scheme requires amendment in Parliament.
Under the ‘RGESS’ scheme, as announced in the 2012-13 Budget, investment in equity by the first-time investor will be eligible for deduction of up to Rs 25,000 from his taxable income.
A person can get the tax benefit only once and the condition is that his annual income should not exceed Rs 10 lakh.
Earlier, the scheme had proposed to allow first-time investment in equity to get tax benefit. But after the recommendation of SEBI that the RGESS should also provide for investments in equity schemes of mutual funds which have the securities allowed under RGESS as the underlying.
