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Redeeming Reinvested Dividends

Wait for each reinvested dividend of an ELSS fund to complete the lock-in period before redeeming…

I had invested in Magnum Taxgain in the dividend-reinvestment option 2008. At present the fund is not giving good returns and I plan to exit from the fund. But I am unable to redeem all my units as the reinvested units again have a lock in period of 3 years. This is a never ending process. Please let me know how I can overcome this and redeem all of my units in one go?
- Praveen Walia

All tax planning mutual funds have a three year lock in period. This is true for the reinvested dividend which kicks-in from the day the dividend is reinvested and applies to each reinvested dividend. You will have to wait for each of the reinvested dividend to complete the lock-in period to redeem the units. There is a way out of this unending process; you can opt out from a dividend reinvestment plan by requesting the AMC or filling up the ‘change in option’ slip, which appears at the bottom of the account statement.

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