Can I Redeem my ELSS Mutual Fund Investments in One Go? (2024)

FAQs

Can I Redeem my ELSS Mutual Fund Investments in One Go? ›

If you have made your ELSS Mutual Fund investment via the lump sum route, i.e., in one go, all your units will be allotted on the same day. And therefore, once the 3-year lock-in period is over, you can redeem your entire ELSS investment in one go.

To withdraw ELSS lump sum after the mandatory lock-in period of three years gets over, one can raise redemption request through online or by visiting the respective mutual fund branch. However, when it comes to ELS SIP, each instalment is treated as a separate investment.

Each SIP instalment is a new investment, so each instalment has a three-year lock-in period. This period is calculated from the day units are allotted for that month's instalment. So if the SIP instalment date for your ELSS investment is January 1, 2022, you will be able to redeem that after January 1, 2025.

How ELSS sip withdrawal works? Greetings, ELSS which stands for Equity linked saving scheme has a lock-in period of 3 years, therefore you will be able to withdraw (partially or entire amount) from the scheme only after the completion of three years.

Because ELSS funds invest largely in stock and equity-related securities, they are an equity-oriented tax-saving investment choice. ELSS funds have a three-year lock-in period, which means investors cannot redeem their investments before this time.

In the case of ELSS, the lock-in period is three years. When you are making a lumpsum investment, it is easy to understand how the lock-in period works. You can withdraw the entire amount once the investment completes 36 months. However, things are a bit complicated when you are investing periodically through SIPs.

You can generally withdraw money from a mutual fund at any time without penalty. However, if the mutual fund is held in a tax-advantaged account like an IRA, you may face early withdrawal penalties, depending on the type of account and how the mutual fund has performed.

All ELSS funds have a lock-in period of three years. Once the lock-in period ends for a particular instalment/lump sum investment, the ELSS becomes an open-ended equity-oriented investment scheme with full liquidity.

Since ELSS funds are locked-in for three years, there is no possibility of realising short-term capital gains. Therefore, you can realise only long-term capital gains. These gains of up to Rs 1 lakh a year are made tax-free, and any gains above this limit attract a long-term capital gains tax at 10%.

How long will you take to receive your fund redemption amount? When you redeem your mutual fund, you will typically receive your unit's funds within 1 to 5 working days. If you redeem a debt-related fund or a liquid fund, you will get your money within 1 to 2 working days.

Can we stop ELSS anytime? ›

Yes, it is possible to stop your SIP investments in mutual funds, including your equity linked saving schemes (ELSSs). If you have gone through a mutual fund advisor, you can ask him for help. You just need to fill up the form - the procedure is the same if you have invested offline.

The lock-in period for ELSS funds lasts for 3 years from the date of your investment. To find out when it ends, simply add 3 years to the date you invested. If you invest through SIP, consider each installment as a separate investment with its own lock-in period. Once the lock-in period is over, you have some options.

ELSS funds can help achieve your financial goals by creating an equity-linked corpus. So, don't stop your ELSS investments, whatever tax regime you choose. If you choose the old regime, you can claim Section 80C deductions on ELSS investments and an exemption on long-term capital gains.

You can definitely invest in more than one ELSS. The only thing to remember is that you can only save upto Rs 1.5 lakh under section 80C. If you are already saving 1.5 lakh, you can choose another equity scheme rather than going for another ELSS. Invest in ELSS only if you want to save taxes.

Lock-in Period

ELSS funds have a lock-in period of three years which is the lowest compared to other investments under the section. Hence, you cannot redeem the units of an ELSS fund before the completion of three years. This helps in generating compounded returns.

Since ELSS funds are locked-in for three years, there is no possibility of realising short-term capital gains. Therefore, you can realise only long-term capital gains. These gains of up to Rs 1 lakh a year are made tax-free, and any gains above this limit attract a long-term capital gains tax at 10%.

Is it possible to do so? Yes, it is possible to stop your SIP investments in mutual funds, including your equity linked saving schemes (ELSSs). If you have gone through a mutual fund advisor, you can ask him for help. You just need to fill up the form - the procedure is the same if you have invested offline.

First, you will need to inform your mutual fund company as well as the bank via which your investment is made on a monthly basis, regarding your plan to discontinue the scheme. Next, you will need to obtain an appointment form from asset management companies (AMCs) or Registrar and Transfer Agents of mutual funds.

When you sell your equity fund units after holding them for at least a year, you realize long-term capital gains. These capital gains are tax-free, up to Rs 1 lakh per year. Any long-term capital gains over this threshold are subject to a 10% LTCG tax, with no benefit of indexation.