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|December 30, 1998||
Equity linked savings scheme modified to encourage investments
The government will modify the equity linked savings scheme permitting open ended schemes subject to the condition that a mutual fund will be permitted only one scheme.
This modification would enable an investor to join the scheme at a time of his choice and still gain the tax benefits during the financial year of investment.
Government has taken this decision in tune with the changing requirements of the market and with a view to further encourage investments in equity instruments.
It has also been clarified that the three year lock-in specified under the scheme would commence from the date of allotment or holding of units as the case may be and not just April 1, regardless of the date of allotment.
Government had notified the equity linked savings scheme in 1992 under section 88 of the Income Tax Act 1961. Investments upto Rs 10,000 under these schemes floated by mutual funds and the Unit Trust of India qualify for tax rebates under Section 88 of the Income Tax Act 1961, the release said.
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