Can I take the entire SIP amount from ELSS mutual fund after three years? (2024)

FAQs

Can I take the entire SIP amount from ELSS mutual fund after three years? ›

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.

While there is a mandatory lock-in of three years, you don't have to mandatorily redeem the units once the lock-in period is over. After the end of the lock-in period, the fund becomes a diversified, open-ended equity-oriented scheme. You can redeem the units whenever you want.

According to tax regulations, ELSS investments have a three-year lock-in period, which prevents funds from being withdrawn for at least three years from the date of investment. Investors may take partial or full withdrawal of their funds after the lock-in period.

Yes, you can withdraw your SIP after a period of three years when the lock-in period ends. You can either raise an online request or log into the mutual fund's website and raise a redemption request. Q5.

Will I get my money back if I cancel my SIP? No, cancelling your SIP doesn't result in immediate return of invested money; it stops future investments. Can I stop SIP without redeeming? Yes, you can stop SIP without redeeming, halting future investments while leaving existing investments untouched.

The mutual fund SIP calculator shows that a monthly investment of Rs 10,000 in this fund would have grown to approx. Rs 10.9 lakh in three years.

After the three-year lock-in period, investors can redeem their investment or stay invested. But the investor must note that the investment after the deductions is still subjected to 10% tax, though ELSS can give high returns in the long term.

Any individual or HUF looking to save up to Rs 46,800 a year on taxes can consider investing in ELSS. However, these funds are suitable only for those who are willing to take some risk and can stay invested for at least the mandatory lock-in period of three years should invest in ELSS.

Bottom Line. SIP investments provide a safe and effective way to build wealth, save taxes, and achieve long-term financial goals. Remember, the key lies in making informed decisions and staying consistent with your strategy.

What is the tax on SIP after 3 years? ›

Conversely, SIPs invested in debt and other category funds, when held for more than three years, are subject to Long Term Capital Gain (LTCG) tax, and if held for less than three years, Short Term Capital Gain (STCG) tax applies.

Yes, you can typically withdraw money from an existing Systematic Investment Plan (SIP). However, there are certain conditions and procedures you need to follow, which may vary based on the mutual fund company and the specific SIP.

After The Lock-In Period.

As per the latest Tax laws, the income from the ELSS funds after three years is taxed at 10% on the profit exceeding ₹ 1 lakh. Once you know how the Tax policies are regulated during your time of investment will help you strategize your maturity amount redemption decisions.

You may cancel your mutual fund SIPs offline by notifying your bank and the respective AMCs. You can also have your mutual fund agent do it for you. Request a SIP cancellation form from your asset management firm or through online Mutual Fund Registrar and Transfer websites such as CAMS and KFin Technologies Limited.

If the value of the mutual fund's units decreases due to market conditions the SIP investment will also show a loss.

Some mutual fund houses may levy a charge known as the exit load if you withdraw your mutual fund units before the completion of the SIP tenure. The exit load is expressed as a percentage of the total redemption amount and can be anywhere from 0.5% to 2.0%.

What is the penalty for withdrawing from ELSS before 3 years? There is no explicit penalty for withdrawing from an ELSS before the three-year lock-in period is completed. The tax benefits previously claimed on the investment amount, however, would be revoked.

It may take some time for your SIP to get cancelled. However, SIP deductions stop after the waiting period. Your mutual fund investments remain in the fund until you place a redemption or a switch request.