March 25, 2013 9:01 am
My mother is an existing MF investor with less than 5L/yr income. She doesnt have a Demat Ac. Can she invest additional 50K in RGESS certified MF before Mar 31st to save further Tax?
While Ashal and Ramesh have answered why you can avoid RGESS, I would answer your query that without a Demat account you CAN NOT get a tax rebate. No one will stop you from investing, but you would be questioned against the tax rebate.
Dear Dominic, as she is in 10% tax slab, her tax benefit ‘ll be even less than what dear Ramesh has said. After investing 50K, the eligible amount for deduction ‘ll be 25K. So tax benefit ‘ll be 10% of 25K i.e. 2500 Rs.
Now do tell me, do you really want to risk your mother’s 47500 Rs. in direct Eq>
Is RGESS really a good scheme? At max, you will be saving what 5000. Put in costs of demat account.
And add the opportunity losses of a RGESS fund versus a simple diversified equity fund.
Read more about the RGESS fund, and why such a complex scheme has been started by the govt. Because they want people to help them divest their PSUs (check the eligibility of the RGESS funds, which includes a lot of PSUs).
Its a strict no-no for me, even if she is allowed.
(I have not answered your specific query, just the deeper one).
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