The finance minister had announced the Rajiv Gandhi Equity Scheme in this year’s budget. Can you tell me more about this scheme? Will it be a good investment option if the finance bill is passed?
-Parshuram
The Rajiv Gandhi Equity Scheme will not function like a mutual fund. People with annual income of up to Rs 10 lakh will be able to invest up to Rs 50,000 in this scheme, on which they will receive a tax rebate of 50 per cent. Hence, they will be able to deduct up to Rs 25,000 from their taxable income. This scheme will be available only to first-time equity investors, those who have never invested in equity before and don’t hold a demat account in their name. We believe that this scheme was devised in haste. We still don’t know a lot of its finer details, but from what we do know, we believe this could be a dangerous investment vehicle because this scheme is not the ideal way for new investors to begin investing in equities.
This article was originally published on April 26, 2012.
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