The Finance Ministry is likely to launch the Rajiv Gandhi Equity Scheme,which is aimed at boosting retail investments in the capital market,by August 15.
Officials from the Department of Economic Affairs (DEA) would meet counterparts in market regulator Sebi next week to finalise the details of the scheme,a senior finance ministry official said.
We have sent the final rules on Rajiv Gandhi Equity Scheme to Sebi and hope to launch it by August 15. Sebi’s feedback needed for ease of operation, the official said.
In order to encourage savings and improve investment in capital markets,former Finance Minister Pranab Mukherjee in Budget 2012-13 had announced the 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 three years.
Last month,Sebi had asked the government to route investment into the scheme through mutual funds for minimising risks associated with direct stock market investment for new investors.
A retail investor can avail the scheme only once in a lifetime. This is the first-ever tax benefit scheme announced by the government to encourage retail investors participation in the equity market.
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.