Can I withdraw money from ELSS (Magnum Taxgain) for which the SIP started in November 2006 and ended in Nov 2009?
- Niky
Investing in mutual funds through SIPs is a good move as you get the dual benefit of long-term investing and averaging. But investing in tax saving funds through SIPs can get tricky as each SIP is a fresh investment in the fund and each instalment in a tax saving fund needs to complete three years of holding, which is the compulsory lock-in period.
If you have been investing through SIPs in the fund since November 2006, it does not mean that the lock-in period will get over in November 2009. Only the first SIP would have completed its lock-in period in November 2009. The subsequent units bought by SIP investments after November 2006 can be redeemed only with each passing month when they complete their three-year lock-in. So, for the SIP that ended in November 2009, the lock-in will remain till November 2012. However, you can redeem the units acquired till February 2008, which would have completed the three-year lock-in last month.
This article was originally published on March 25, 2011.
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