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No Deductions, No Lock-in

The three-year lock-in period in tax-saving funds doesn't apply if you don't seek tax deductions….

I had invested in BSL Tax Relief 96 and Sundaram Tax Saver in 2009 only as an investment and not for tax saving. I have not declared my investment in these funds to claim deductions. I want to redeem units in these funds. Can I redeem it before the three year lock-in mandated for such funds?
- R.Mukundan

If you had not invested in the tax planning funds to save tax, the three-year lock-in does not apply which is mandatory for only those seeking tax deductions by investing in these funds. You can redeem your investments in these two funds whenever you wish. As both these funds are like any other equity fund, you will not be faced with paying capital gains tax on your gains when you redeem as you have already been in these funds for over one year.

This article was originally published on June 28, 2011.

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