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Rajiv Gandhi Equity Savings Scheme (RGESS)

If you haven't ever invested in the capital markets, but have always been wanting to, NOW is the best time. Introducing the Rajiv Gandhi Equity Savings Scheme (RGESS). Now you can invest in the capital markets, gain its benefits, while also enjoying the benefit of tax exemption up to Rs. 25,000. RGESS is available for both, our online and offline customers, all you have to do is fill up a 'Form A' and an account opening form (If you are not an existing account holder)

As per the newly introduced Section 80-CCG, this scheme is available only to a "New Retail Investor" on investments in the 'Eligible Securities'.

Who is considered as a 'New Retail investor'?

You will be considered as a 'New Retail Investor':

If your annual income is less than or equal to Rs.12,00,000/-
If you have never traded in the Equity or Derivatives segment
If you have never opened a Demat A/c
If you're an existing Demat A/c holder but have not made any
  transaction in the Equity or Derivative Segment

Which securities are considered as 'Eligible Securities'?

'Eligible Securities' means securities that you can trade in, and receive tax exemption under, the Rajiv Gandhi Equity Savings Scheme (RGESS). They are as follows:

Stocks that are part of 'CNX-100' (by NSE) or 'BSE-100' (by BSE)
Equity shares of public sector enterprises that are categorized as
  Maharatna, Navratna or Miniratna
Units of Exchange-Traded Funds (ETFs)* or Mutual Fund schemes*

*List of Mutual Fund Schemes and ETFs would be declared on an ongoing basis as and when the notification of the fund or ETF's eligibility is received.

Rajiv Gandhi Equity Savings Scheme (RGESS) - Features

Account opening fee

No account opening fee if your margin at the time of opening the account is more than Rs. 50,000. If your margin is below Rs 50,000 an account opening fee of Rs. 750 will be charged

Demat account charges

No demat charges for the first year. After one year, standard demat charges will be charged

Brokerage Rate

Brokerage details are as follows:

Delivery 0.49%
Square off(Both Sides) 0.049%
Futures(Both Sides) 0.049%
Options Rs.100/- per lot or 1% on premium whichever is higher
Minimum Brokerage 4 Paise for delivery and 3 paise for Intraday and Futures

Holding Period

(I) The holding period of eligible securities is three years, with 'Fixed lock-in period' of 1 year (first year) and a 'Flexible lock-in period' of two years.

In the first year, when the 'Fixed lock-in period' is applicable, you will be allowed to sell your shares provided you submit Form B within 30 days from date of transaction. If you do not submit the 'Form B' the shares would be automatically locked for a period of one year (As per the scheme policy).

Unlike few other traditional instruments, from 2nd year onwards, 'Flexible lock-in period' will apply, during which you will be permitted to trade, and capitalize on gaining opportunities, subject you fulfill the given conditions.

Tax benefits

You can enjoy tax benefits for consecutive 3 years by investing a minimum of Rs.50,000 every year.

For E.g. If you invest Rs.50,000 every year for 3 years, and provided that you adhere to the fixed and flexible lock-in period conditions, you can avail tax deduction of up to maximum of Rs.25,000 in each of the 3 years.

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