Hindu Business Line is a good newspaper….and they normally do good stories. Here is a story based on THEIR reporting of the Rajiv Gandhi Equity Scheme.
Most people have not been able to comment on the RGES because the details are sketchy.
From the Hindu Business Line article, I learn that:
It is a scheme for encouraging equity investments (not that the ‘Babu’ sitting in Delhi knows the difference between the investor and the trader).
It will have a LOCK-IN of 3 years (The scheme will have a lock-in period of 3 years,” said Mr Pranab Mukherjee, Finance Minister, Government of India)
The deduction will be 50% of the Capital Gains Tax (let us say you are a person in the 20% slab you will pay 10% as cap gain). For example if your cost was Rs. 10,000 and you were selling it for Rs. 14,000 – you will make a profit of Rs. 4000. On this you would have paid 20% of 4k = Rs. 800.
Because of this provision, now you would be paying Rs. 400 (50% discount).
I have a few questions to ask:
– if there is a LOCK IN of 3 years, where is the question of SHORT TERM CAPITAL gains at all?
– what is this Rs. 50,000? Investment or profit?
-from looks of it, it is poorly worded, and as usual confusing
-Government wording is tough to understand for sure!!
PS: this is COMPLETELY WRONG I have written it as a JOKE. Many people reading my blog lose the humour……..and get confused. Hence this clarification.
Source:Subramoney.com