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To get the returns in line with the returns of RGESS eligible securities. .
• Gains if any, arising of investments in RGESS, can be realized after a year. It has a short fixed lock in period of just 1 year.
• Dividend payments are tax free.
Benefits of investing in ICICI PRUDENTIAL EQUITY SAVINGS FUND (RGESS) - SERIES 1
• The fund offers diversification benefits to investors.
• The fund will be managed by experienced professionals.
• By investing as low as Rs. 5000 will give you exposure to the Top 100 companies listed on BSE Limited and National Stock Exchange, as the case may be • The fund offers liquidity i.e. the scheme will be listed on BSE Limited and National Stock exchange
What is the tax benefit under RGESS?
As per Section 80CCG of the Income-tax Act, 1961, investments made by 'New Retail Investor' in this Scheme will qualify for a 50% deduction of the actual amount invested from the taxable income of the financial year. The maximum investment permissible for claiming deduction in a financial year is Rs. 50,000. Only new retail investors having gross total annual income less than or equal to Rs.12 Lakhs will be eligible to claim deduction under the said section from his/her taxable income for that financial year.
Let us say, you invest Rs.50,000 under RGESS, the amount eligible for deduction from your taxable income will be Rs.25,000. Similarly, if you invest Rs.40,000 under RGESS, the amount eligible for deduction from your taxable income will be Rs.20,000.
Who is a 'New Retail Investor'?
A 'New Retail Investor' having a gross total annual income less than or equal to Rs. 12 lakh inconm:
• Who is a resident individual (the benefit cannot be availed by corporate entities / trusts etc) and
o Who has not opened a Demat account and has not done any trading in the derivative segment till RGESS account opening date.
o Those who have opened the Demat account and have not made any
transactions in equity and /or in the derivative segment till designating such account as RGESS.
In case of joint accounts, only the first account holder will be considered as the existing retail investor. All those existing account holders other than the first demat account holder (eg. second / third account holders or other joint holders) or nominees of the
existing account holders will be considered as new retail investors for the purpose of opening of a fresh RGESS account, if otherwise eligible. In case the demat account is opened as a first holder, but there are no transactions in the equity or derivative segment, still the first account holder is eligible.
I am a non-resident Indian; Am I eligible for RGESS?
A non-resident Indian investor will be allowed to invest in this fund; however, the investor will not be eligible for tax benefit under RGESS.
I possess some physical shares; Am I eligible under RGESS?
Yes. You will be considered as a new retail investor, if otherwise eligible. However, you need to make fresh investments to avail of the benefits under RGESS. You will not be eligible to claim benefits of RGESS on dematerialisation of such shares.
I am already having units of mutual fund and / or Exchange Traded Funds; Am I eligible for the RGESS?
Yes. Prior investments in mutual funds and Exchange Traded Funds do not make an investor ineligible for RGESS. However, you need to invest afresh in RGESS eligible mutual fund /ETF schemes and hold them in a demat account to avail of the benefits under RGESS.
What is 'Fixed Lock-in' period?
'Fixed Lock-in' period shall commence from the date of purchase of first set of eligible 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).
Can I sell the fund during 'Fixed Lock-in' period?
An investor who is availing the tax benefits under RGESS will not be allowed to sell, pledge or hypothecate eligible securities during 'Fixed Lock-in' period.
What is 'Flexible Lock-in' period?
The period of two years beginning immediately after the end of the fixed lock-in period shall be called the 'Flexible Lock-in' period.
During 'Flexible lock-in' period, you can sell eligible securities held in your demat account and remain eligible to claim tax benefit under RGESS, provided that, the RGESS demat account is compliant for a cumulative period of minimum 270 days during each of the two years of the flexible lock-in period. This means that the investor gets almost a quarter of the year to churn the portfolio.
What will happen in case I fail to comply with any condition specified in the scheme?
The deduction availed under the scheme will be added back to your taxable income for the financial year in which you have failed to comply with any condition specified under RGESS and you shall be liable to tax as per the provisions of the Income Tax Act, 1961.
How to open RGESS demat account with a Depository Participant (DP)?
You may approach any registered DP to open a demat account under RGESS. The list of DPs registered with NSDL and CDSL is available on the NSDL website, www.nsdl.co.in and CDSL website, www.cdslindia.com You are required to fulfil the Know your client (KYC) norms prescribed by SEBI by submitting proof of identity, proof of address, etc. and provide PAN to the DP with whom you wish to open a demat account along with a declaration in prescribed format (i.e., 'Form A') for availing RGESS benefits.
For more details see the FAQ given by NSDL and CDSL on their respective website.
Can I designate an existing demat account under RGESS?
Yes, provided you are eligible as a 'new retail investor' under RGESS. To designate your existing demat account under RGESS you need to submit a declaration in prescribed format (i.e., 'Form A') to your DP.
Is there any maximum limit for investment in ICICI PRUDENTIALEQUITY SAVINGS FUND (RGESS) - SERIES 1?
There is no maximum limit for investment in ICICI PRUDENTIAL EQUITY SAVINGS FUND (RGESS) - SERIES 1. However, RGESS benefits will be available only for investments in eligible securities up to Rs. 50,000. The investments can be made in instalments and in different RGESS securities.
How much tax deduction will I be eligible for under RGESS?
You will be eligible to get tax deduction u/s 80CCG on 50% of the amount invested. Let us say, you invest Rs.50,000 under RGESS, the amount eligible for tax deduction will be Rs.25,000 from your taxable income. Let us say, you invest Rs.40,000 under RGESS, the
amount eligible for tax deduction will be Rs.20,000 from your taxable income. This deduction is over and above Rs. 1 lakh limit specified under Section 80C.
Can I split investment under RGESS over two financial years and claim deduction?
No. Only the investment during the first financial year can be booked as investment under RGESS to claim deduction
Will I get tax deduction every year for investment in this fund?
No. Tax benefits are allowed only in the first financial year of investments under RGESS.
Even if one claims small deduction under RGESS in first financial year no further deductions can be claimed in subsequent years.
Can I invest more than Rs.50,000 and claim tax benefit under RGESS?
You may invest any amount in a demat account designated under RGESS, but the tax benefit under RGESS can be claimed only on investment up to Rs. 50,000
How does the New Retail Investor claim tax benefit under this scheme?
The New Retail Investor will have to submit a declaration, as in Form 'A', to the Depository Participant (DP) at the time of account opening or designating his existing demat account for taking the benefits under RGESS. Eligible securities, which are brought thereafter into such an account, will be automatically subject to lock-in upto a value of Rs. 50,000, unless the investor specifies otherwise through the Form 'B' specified in this regard.
What is Form A under RGESS?
Form A is declaration to be submitted by the investors to DP for availing the benefits under RGESS.
What is Form B under RGESS?
Form B is a declaration to be submitted by New Retail Investor to a DP on purchase of Eligible securities which are not to be included as RGESS investment. This will ensure that these securities are not locked in by the depository. This form has to be submitted within 1 month from the date of purchase /allotment of eligible securities to the DP.
What will be the mode of holding eligible securities for availing tax benefit under RGESS?
The mode of holding eligible securities under RGESS will be in a 'Demat account'.
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