Synopsis
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iStockIf I am investing in an ELSS mutual fund using SIP, when will the three year lock-in period start? Can I take the entire amount of SIP after three years from the starting date of SIP?
-Raja Shekar
As you know, an ELSS or Equity Linked Saving Scheme, like all other tax-saving investments, comes with a mandatory lock-in period. 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. If you are investing via an SIP, the three-year lock-in period is applicable to every SIP instalment. That means, only the first SIP instalment will complete three-year or 36-month lock-in period at the end of three years. Every SIP instalment needs to complete 36-months before you can take the money out.
( Originally published on Jan 22, 2020 )
(If you have any mutual fund queries, message us on ET Mutual Funds on Facebook. We will get it answered by our panel of experts.)
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