Live Budget 2013-14: FM enhances reach of Rajiv Gandhi Eq scheme

Moneycontrol Bureau

In a bid to boost retail investors' participation in the capital markets, the Finance Minister - P Chidambaram expanded the reach of Rajiv Gandhi Equity Savings Scheme,  a programme that allows tax breaks to first-time stock market investors. The Union Budget 2013-14 proposed to include both stock market and mutual fund investments for tax break.

A first time investor can continue to enjoy tax benefits for the three successive years. At the same time, income level for the investor has been increased to Rs 12,00,000 from Rs 10,00,000 earlier.

Individuals can save a maximum of Rs 5,000 for an equity investment of up to Rs 50,000 a year. The sum is mostly considered paltry. The increase is likely to lure more retail investment in the equity market.

In the Union Budget 2013, the Finance Minister - P Chidambaram said last month that he would make the Rajiv Gandhi Equity Savings Scheme, a program that gives tax breaks to first-time stock investors, more attractive.