On another thread, I had asked whether one can invest one's savings with one's spouse, and its implications. There are various implications like clubbing of interest income, treatign it as a loan with interest, etc.
Now, it so happens that my wife is employed by the government of Rajasthan, and she was reluctant to invest with my funds. (I didn't even ask her to invest with her own funds as I didn't want to be blamed for losse; She is a straightforward employee, and compes from a family which doesn't invest in stocks).
I found something which may be of interest to those who are government employees or those who have such people as family members.
Here's the bare text of the relevant central government rule. (Applies to central govt employees other than All India services). Here's the corresponding rule for All India services, and the wording seems to be identical.
Here's a detailed explanation on ET, which provides what's reasonably allowed, and what's likely to be contentious. "Speculation" is not allowed, without defining what it is, although the clause (3) in both rules say that
Long term appears to be allowed.
Now, I am glad I found these, as what I was primarily planning to do was
1. Subscribing to IPOs and flipping for a porfit.
2. Buying shares and tendering for buyback, and flipping the rest (If one only tendered for buyback, and held the rest for long term, what would happen?) I guess it would be treated as speculative, and then there's clause 3.
In any case, these would be problematic at best, if not outright illegal.
Now for the kicker - wife's a Rajasthan state government employee. Here's the corresponding rules from the government of Rajasthan. (Point # 19). Seems they've copied an earlier version of the central govt rules, and this doesn't even contain the part of clause 1 of the central govt rules
Conclusion: If you're a central government employee, you're pretty much allowed to do only long term investment, and avoid IPOs, etc where you're involved in price setting. There could be other restrictions like not buying from promoter. Then, there are/could be reporting requirements, which could change from time to time. If you are a state government employee, you need to see your state government service rules.
Not sure whether it applies to PSU banks and PSUs - my late grandfather worked for the erstwhile SBBJ, and used to buy and sell shares, not sure with what frequency.
While these restrictions may appear to some to be silly and unnecessary, it plays some role in preventing conflicts of interest. Also glad that those with ill gotten gains don't find it so easy to compound their wealth (Though the taxman could still catch them, even in the absence of these restrictions).
Now, it so happens that my wife is employed by the government of Rajasthan, and she was reluctant to invest with my funds. (I didn't even ask her to invest with her own funds as I didn't want to be blamed for losse; She is a straightforward employee, and compes from a family which doesn't invest in stocks).
I found something which may be of interest to those who are government employees or those who have such people as family members.
Here's the bare text of the relevant central government rule. (Applies to central govt employees other than All India services). Here's the corresponding rule for All India services, and the wording seems to be identical.
Here's a detailed explanation on ET, which provides what's reasonably allowed, and what's likely to be contentious. "Speculation" is not allowed, without defining what it is, although the clause (3) in both rules say that
Long term appears to be allowed.
Now, I am glad I found these, as what I was primarily planning to do was
1. Subscribing to IPOs and flipping for a porfit.
2. Buying shares and tendering for buyback, and flipping the rest (If one only tendered for buyback, and held the rest for long term, what would happen?) I guess it would be treated as speculative, and then there's clause 3.
In any case, these would be problematic at best, if not outright illegal.
Now for the kicker - wife's a Rajasthan state government employee. Here's the corresponding rules from the government of Rajasthan. (Point # 19). Seems they've copied an earlier version of the central govt rules, and this doesn't even contain the part of clause 1 of the central govt rules
Conclusion: If you're a central government employee, you're pretty much allowed to do only long term investment, and avoid IPOs, etc where you're involved in price setting. There could be other restrictions like not buying from promoter. Then, there are/could be reporting requirements, which could change from time to time. If you are a state government employee, you need to see your state government service rules.
Not sure whether it applies to PSU banks and PSUs - my late grandfather worked for the erstwhile SBBJ, and used to buy and sell shares, not sure with what frequency.
While these restrictions may appear to some to be silly and unnecessary, it plays some role in preventing conflicts of interest. Also glad that those with ill gotten gains don't find it so easy to compound their wealth (Though the taxman could still catch them, even in the absence of these restrictions).
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