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ELSS Lock-in Ambiguities

Each individual SIP installment in a tax-planning fund is treated as a fresh investment…

How is the lock-in calculated in the case of monthly SIPs in tax saving funds? If I started a SIP on April 1, 2011, it will end of April 1, 2014; can I withdraw all the units in April 2014?
- Rajendra

Investing in tax planning mutual 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. So, if you are starting a one year SIP in the fund from April 2011, the last SIP invested will be in March 2012. The lock-in for the first SIP instalment will end in April 2014; likewise the one-year lock-in for the last SIP will be in March 2015. You won’t be able to withdraw all the units before April 2015, when the last SIP investment completes its three-year lock-in. However, you will be able to redeem the units as they complete their three-year lock-ins, which means in case you wish to redeem June 2011 SIP, it will be only in June 2014.

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