Over a month after the final guidelines were issued by the SEBI (Securities and Exchange Board of India) not many MFs (mutual funds) seem to be keen to launch the RGESS * (Rajiv Gandhi Equity Savings scheme). Only 3 (three) fund houses have filed draft offer documents, records with SEBI showed.
Even of these three, 2 were state owned bank sponsored - SBI & IDBI. DSP Blackrock is the only private fund house that has shown interest by filing for the scheme.
Filing draft papers SEBI is mandatory before launching new schemes & the market regulator SEBI takes about 3 weeks to a month to clear these schemes.
Tax Saving Season..!
Though the tax saving season technically extends till end of March, 2013 most organizations require their staff to plan their tax savings & give declarations by end of January, 2013. Thus, even these few schemes are most likely to miss the bus this tax year, say distributors.
Mr. J Krishnan, Integrated Enterprises said, “By the time the schemes are out, the salaried class would have already completed their tax formalities.So, practically we are at the end of the season. Further, the product is not simple. And for all its complexities, the maximum saving is capped at Rs. 5,150 per year as the tax payers in 30 per cent bracket are not eligible.”
Fund managers agree the RGESS is an ideal tool to take the MF product to centres beyond the top 15 cities.
Mr. Hemant Rustagi, CEO, Wiseinvest Advisors said, “The scheme can work for investors who believe in equity. If you are not convinced about equity, no amount of tax benefit can make you invest. while the salaried class may be out, Self employed people may still look at picking up the RGESS units, as and when they are launched."
Some mutual funds are restructuring their existing schemes to be compliant with the RGESS requirements. Under the scheme, investment in the top 100 listed stocks & top PSUs (public sector units) are eligible for tax benefits.
The central government’s proposed PSU Exchange Traded Fund (ETF) is also unlikely to be ready in time for the tax season of the salaried class.
* RGESS allows first time investors with gross total income of below Rs. 10 lakh a tax rebate on 50 per cent of the sum invested.
Src: Business Standard, Mr. N. Sundaresha Subramanian
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