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.
This article was originally published on June 15, 2011.
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