Birla Sun Life Rajiv Gandhi Equity Savings Scheme – …€¦ · Rajiv Gandhi Equity Savings Scheme ... (Investment Manager for Birla Sun Life Mutual Fund) One IndiaBulls Centre

RGESS Tax Benefit

1. What is RGESS?Rajiv Gandhi Equity Savings Scheme (RGESS), is a tax saving scheme announced in the Union Budget 2012-13 (para 35). The scheme is designed exclusively for the first time retail individual investors in securities market, whose gross total income for the year is less than or equal to ̀ 10 Lakh. The investor would get under Section 80CCG of the Income Tax Act, a 50% deduction of the amount so invested, upto a maximum investment of ̀ 50,000, from his/her taxable income for that year.

2. Who is eligible for tax benefits under RGESS?The tax benefit under section 80CCG of the Income Tax Act, 1961 (IT Act 1961) is available to a “New Retail Investor” which is defined as:• A Resident Individual.• Someone who has not opened a Demat account and not made any transactions in the derivative segment before

November 23, 2012. or• Someone who has opened a Demat account before November 23, 2012 but has not made any transactions in the

equity segment or the derivative segment till November 23, 2012.• Is not the first account holder of an existing joint Demat account.• Someone whose Gross Total Income for the Financial Year in which investments are made is less than or equal to

`10 Lakhs.

3. What is the tax benefit for investing under RGESS? Is this a part of my current exemption limit under section 80C?Investments made by eligible investors in accordance with RGESS guidelines would qualify for exemption under section 80CCG of the IT Act 1961. An investor will be eligible to get a deduction of 50% on the amount invested from his taxable income for that year. The maximum investment amount available for claiming exemption is INR 50,000.

The tax deduction for RGESS is u/s 80CCG and it is over and above the ` 1 Lakh limit specified under Section 80C. Further, it is not mandatory for citizens to exhaust the limit of ̀ 1 Lakh specified under Section 80C to make investments under Section 80CCG for RGESS. (Please note that various tax deduction(s) available under IT Act 1961 are subject to conditions specified therein from time to time.)

4. How do I avail of the Tax Benefit under RGESS?For an eligible investor, RGESS tax benefit can be availed as follows:

i. RGESS designated Demat Account: Open a new Demat account with any Depository Participant (DP) and designate it under RGESS or designate your existing Demat account under RGESS.

You are required to fulfil the KYC norms prescribed by SEBI by submitting proof of identity, proof of address, copy of PAN card, etc. to the DP with whom you wish to open a Demat account along with a declaration in prescribed format (i.e., 'Form A') for availing tax benefits under RGESS guidelines

Birla Sun Life Rajiv Gandhi Equity Savings Scheme – Series 1A Close Ended Equity Scheme investing in Eligible Securities as per Rajiv Gandhi Equity Savings Scheme, 2012

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Birla Sun Life Asset Management Company Limited (Investment Manager for Birla Sun Life Mutual Fund)One IndiaBulls Centre Tower 1, 17th Floor, Jupiter Mills Compound, 841, Senapati Bapat Marg, Elphinstone Road, Mumbai - 400013

Call Toll-Free : 1800-270-7000 MTNL/BSNL : 1800-22-7000

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ii. Investment in Eligible Securities: You may approach any SEBI registered stock broker for making investment in any 'eligible securities' for RGESS from the secondary market. In case you are investing in eligible mutual funds, you need to simply provide your Demat account details like Demat Account Number and DP ID for receiving credit

of the mutual fund units into the Demat account.

iii. RGESS Certificate: The “new retail investor certificate” will be issued to you by the concerned DP after verification of your credentials across other depositories and exchanges. You are required to indicate these details in the Income Tax returns filed by you, to avail of the Tax benefit

5. I have invested in Equity Mutual Funds/ ETFs but not in stocks or derivatives. Do I qualify for RGESS?Yes. Prior investments in Mutual Funds and Exchange Traded Funds do not make an investor ineligible for the Scheme. However, you need to invest afresh in RGESS eligible mutual fund /ETF schemes and hold them in a Demat account to avail of the benefits under RGESS.

6. I possess some physical shares; Am I eligible under RGESS?Yes. You will be considered as a new retail investor, if otherwise eligible. However, you need to make fresh investments to avail of the benefits under RGESS. You will not be eligible to claim benefits of RGESS on dematerialization of such shares.

7. I had equity holdings in the past but currently have none in my Demat account. Do I qualify?No. Tax benefit under RGESS is currently available to “new retail investors” who have not made any transactions in the equity segment or the derivative segment till designating such account as RGESS.

8. Can I use my existing Demat account for RGESS Investments?In case you already have a Demat account and qualify as 'new retail investor' as per RGESS guidelines, you can designate your existing Demat account as a RGESS account by approaching your Depository Participant, and submitting a declaration in prescribed format (i.e., 'Form A') to your DP.

9. Is there a lock-in for RGESS investments?Only in case tax benefit availed, there is a lock-in period of 3 years for investments made under RGESS. Of this, the first year is the Fixed lock-in period and the subsequent two years will be Flexible lock-in period.

Fixed Lock-in: The tenure of Fixed Lock-in period starts from the date of purchase of the eligible securities and ends after one year from the date of purchase of the last set of eligible securities. In the fixed lock in period you are not permitted to sell / pledge / hypothecate your securities.

Flexible Lock-in: Flexible lock period starts after the end of Fixed lock in period and continues till 2 years. In this period you are permitted to trade in eligible securities. Provided that Demat account should be RGESS compliant for a minimum of 270 days.

10. What will happen in case I fail to comply with any condition specified under RGESS guidelines?The deduction availed will be added back to your taxable income for the financial year in which you have failed to comply with any condition specified under RGESS and you would be liable to taxes as per the provisions of the Income Tax Act, 1961.

Disclaimer: The information on taxation is provided for general information only. For complete details, investors are also requested to read section 80CCG of the Income Tax Act, 1961 and the notification on Rajiv Gandhi Equity Savings Scheme, 2012 issued by Ministry of Finance. In view of the individual nature of tax implications, Investors are requested to consult their tax advisors for the RGESS related and other tax implications before investing in the Scheme.





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Birla Sun Life Rajiv Gandhi Equity Savings Scheme – Series 1

1. Where will the scheme invest?Birla Sun Life Rajiv Gandhi Equity Savings Scheme will predominantly invest in securities which are specified as 'Eligible Securities' under RGESS guidelines. Eligible Securities under RGESS guidelines mean the following:• Large Cap stocks: Equity shares of Top 100 listed companies in India, i.e. which are a part of "BSE-100"

or "CNX-100" Index on the day of purchase.

• Stocks of Government Enterprises: Equity shares of Public Sector Enterprises (PSE) which are categorised as Maharatna, Navratna or Miniratna by the Central Government. IPOs of PSEs which has at least 51% Govt shareholding, and an annual shareholding of at least ̀ 4,000 Crore, during each of the preceding three years.

• Units of Mutual Fund schemes or Exchange Traded Funds which invests in the said eligible securities provided they are listed and traded on a stock exchange and settled through a depository mechanism.

• IPOs /NFOs of above mentioned companies/schemes.

2. What is the investment strategy?The scheme will invest in a mix of select Large Cap Equities and high quality PSE stocks as mentioned in the investment universe specified for RGESS, to create a diversified portfolio of securities. The fund manager would primarily focus on long term growth for identifying stocks. The objective would be to identify business with superior growth prospects and strong management available at reasonable valuation and offering higher risk adjusted returns. The Scheme would follow blend of bottom up approach (for stock selection) and top down approach (for sector allocation).

3. Who is the Fund manager of the scheme?The Fund Manager is Mr. Nishit Dholakia who manages few other schemes of Birla Sun Life Asset Management Company, such as Birla Sun Life '95 Fund (jointly managed with Mr. Prasad Dhonde), Birla Sun Life Dividend Yield Plus and Birla Sun Life Pure Value Fund.

4. I am not eligible for RGESS. Can I invest in the scheme?Yes. This is a close ended equity scheme which is available to all investors. You may choose to invest in the scheme even though you are not availing of the tax benefits under RGESS guidelines.

5. Is it compulsory to purchase units in Demat mode?In order to avail Tax benefits under RGESS, you are required to provide your Demat account number and receive unit allotment in your Demat account.

However, if you are not availing tax benefits, you can invest in the scheme directly, and hold physical units, just like any other close ended mutual fund scheme.

6. Can I trade units of the scheme on the exchange?Yes. You are allowed to trade units held by you in Demat form, in the secondary market. However, if you are availing of the tax benefits under RGESS guidelines, the units may be subject to completion of the 'Fixed lock-in' period which will be

monitored by your DP.

7. What happens to my investment at the end of the tenure? Can I switch it to another scheme?The application form allows investors an option to switch his maturity proceeds to Birla Sun Life Cash Manager. However, in the absence of excercising this option in the application form, the redemption proceeds shall be paid out on maturity of the scheme as a default option.

Nishit has more than 11 years experience in Mutual Fund industry and has worked with BSLAMC for 8 years.





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8. Is there a maximum limit for investing in the scheme?There is no maximum limit for investing in the scheme, although the maximum amount eligible for tax benefit under RGESS is capped at ̀ 50,000 in the financial year, for eligible investors.

9. Details of the scheme





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Birla Sun Life Rajiv Gandhi Equity Savings Scheme – Series 1

Type of Scheme

Maturity

Fund Manager

Scheme Benchmark

Minimum Application Amount

Listing

Liquidity

A Close Ended Equity Scheme

3 Years from and including the date of Allotment

Mr. Nishit Dholakia

CNX 100

Minimum of ` 5,000 and multiples of ` 10 thereafter

BSE and NSE

No redemption/repurchase of units shall be allowed prior to the maturity of the scheme. Investors wishing to exit may do so through stock exchange at prevailing listed price on such Stock Exchange, subject to Lock-in Period under RGESS, if any.

Investment Objective

The investment objective of the Scheme is to generate capital appreciation, from a portfolio that is substantially constituted of equity securities specified as eligible securities for Rajiv Gandhi Equity Savings Scheme, 2012 (RGESS).

Plans / Options

Regular Plan - Growth Direct Plan - GrowthRegular Plan - Dividend (payout) Direct Plan - Dividend (payout)

Load Structure (as % of NAV)

Entry Load NilExit Load Nil

*Cash & Cash Equivalent would mean cash (bank balance) or overnight investment in CBLO, reverse repo.^^The Scheme shall invest in Money Market Instruments as defined under SEBI (MF) Regulations with residual maturity of less than or equal to 91 days.

10. What is the NFO Period?The NFO opens on Monday, 25th Feb 2013, and Closes on Wednesday, 20th March 2013.

Asset Allocation

Normal Allocation (% of total Assets) instrument95-100% Equity securities specified as eligible securities for RGESS

0-5% Cash and Cash Equivalents* and Money Market Instruments^^.

Disclaimers: The information on taxation is provided for general information only. For complete details, investors are also requested to read section 80CCG of the Income Tax Act, 1961 and the notification on Rajiv Gandhi Equity Savings Scheme, 2012 issued by Ministry of Finance. Investors are requested to note that fiscal laws may change from time to time and there can be no guarantee that the current tax position may continue in the future. IN VIEW OF THE INDIVIDUAL NATURE OF TAX IMPLICATIONS, INVESTORS ARE REQUESTED TO CONSULT THEIR TAX ADVISORS FOR THE RGESS RELATED AND OTHER TAX IMPLICATIONS BEFORE INVESTING IN THE SCHEME. Certain information on taxation contained in this document have been compiled from sources, which Birla Sun Life Asset Management Company Ltd.(BSLAMC) believes to be reliable, but cannot guarantee its accuracy or completeness and BSLAMC or any of its officers, employees, personnel, directors make no representation or warranty, express or implied, as to the accuracy, completeness or reliability of the content and hereby disclaim any liability with regard to the same. Investors should exercise due care and read all scheme related documents including if necessary, obtaining the advice of tax / legal / accounting / financial / other professional(s) prior to taking of any decision, acting or omitting to act.

Mutual Fund: Birla Sun Life Mutual FundAsset Management Company/ Investment Manager: Birla Sun Life Asset Management Company LimitedRegistered Office: One India Bulls Centre, Tower - 1, 17th Floor Jupiter Mill Compound, 841, S. B. Marg, Elphinstone Road, Mumbai - 400013.

Disclaimer clause of NSE/BSE: It is to be distinctly understood that the permission given by National Stock Exchange of India Limited (NSE) / Bombay Stock Exchange Ltd. (BSE) should not in any way be deemed or construed that the Scheme Information Document has been cleared or approved by NSE/BSE nor does it certify the correctness or completeness of any of the contents of the Draft Scheme Information Document. The investors are advised to refer to the Scheme Information Document for the full text of the 'Disclaimer Clause of NSE/BSE'.

Disclaimer: The information on taxation is provided for general information only. For complete details, investors are also requested to read section 80CCG of the Income Tax Act, 1961 and the notification on Rajiv Gandhi Equity Savings Scheme, 2012 issued by Ministry of Finance. In view of the individual nature of tax implications, Investors are requested to consult their tax advisors for the RGESS related and other tax implications before investing in the Scheme.

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Birla Sun Life Rajiv Gandhi Equity Savings Scheme – …€¦ · Rajiv Gandhi Equity Savings Scheme ... (Investment Manager for Birla Sun Life Mutual Fund) One IndiaBulls Centre