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TMI BlogRajiv Gandhi Equity Savings Scheme, 2012X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mutual Funds, Asset Management 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his 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 sale transaction f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mber, 2012] Government of India Ministry of Finance Department of Revenue Notification New Delhi, the 23rd November , 2012. (Income-tax) S.O. 2777(E).- In exercise of the powers conferred by sub-section (1) of section 80CCG of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following Scheme, namely:- 1. Short title, commencement and application. - (1) This Scheme may be called the Rajiv Gandhi Equity Savings Scheme, 2012. (2) It shall come into force on the date of its publication in the Official Gazette. (3) This Scheme shall apply for claiming deduction in the computation of total income of the assessment year relevant to a previous year on account of investment in eligible securities under 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 acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of an existing joint demat account shall be deemed to have not opened a demat account for the purposes of this Scheme (x) Scheme means the Rajiv Gandhi Equity Savings Scheme; (xi) words and expressions used and not defined in this Scheme, but defined in the Act, shall have the meanings respectively assigned to them in the Act. 4. Eligibility .- The deduction under the Scheme shall be available to a new retail investor who complies with the conditions of the Scheme and whose gross total income for the financial year in which the investment is made under the Scheme is less than or equal to ten lakh rupees. 5. Procedure at time of opening demat account.-The new 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heme nor shall they be counted for availing the benefit under the Scheme; (i) the investment under the Scheme shall consist of all eligible securities covered under the Scheme that are initially bought by the investor under the Scheme or that are bought subsequently by the investor as per the provisions of the Scheme; (j) the deduction claimed shall be withdrawn if the lock-in period requirements of the investment are not complied with or any other condition of the Scheme is violated. 7. Period of holding requirements. (1) The period of holding of eligible securities shall be three 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 imme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ange as a result of involuntary corporate actions like demerger of companies, amalgamation, etc. resulting in debit or credit of securities covered under the Scheme, the deduction claimed by such investor shall not be affected. (10) In case of voluntary corporate actions like buy-back, etc. resulting only in debit of securities, where new retail investor has the option to exercise his choice, the same shall be considered as a sale transaction for the purpose of the Scheme. (11) The Securities 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 design ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Signature of the Investor Place: Date: * Tick which ever is appropriate. Form B [See paragraph 6(c) and (d)] Declaration to be submitted by the new retail investor to the depository participant on purchase of eligible securities. To Depository participant Address It is hereby informed that I have demat account no _________________ in ____________________ depository participant and the following securities (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 ..... 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