Redeeming SIP Units

For SIPs, one year is considered each time you buy units and not from the date of purchase of the first SIP. If I want to redeem my units, how can I do it? Will I have to redeem the exact number of units bought in a month since there will be no distinction between the units? I redeem if I hold the units of a particular month for a year.
-Poonam Shinde

Generally there is no restriction on redemption on units bought through SIP except for ELSS (tax-saving funds) where 3-year lock-in period applies from the date of investment. Though there could be an exit load for early redemption on SIP investment. For calculation of capital gains and to determine applicability of load, the principle of FIFO (First-In-First-Out) is followed. This means when you sell your units, you sell your oldest units first.

This article was originally published on November 19, 2008.