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If I stop my SIPs due to underperformance, what do I do about the accumulated amount?

Dhirendra Kumar suggests exiting the fund, but in a tax-efficient manner


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If I stop my SIPs due to underperformance, what do I do about the accumulated amount?
- Ramrathan

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Transcript: If you have decided to discontinue investing in a fund because it is not doing well, for that very reason you should also move your existing investment in that fund to a better alternative. But you should be careful about the tax implications. You will be liable to pay 15% short-term capital gains tax for the investment made within the last 12 months. But if you are redeeming after 1 year, you are liable to pay 10% long-term capital gains tax, given your gains are above Rs 1 lakh. Therefore, just time your exit so that it is more tax-efficient.

To know more about capital gains tax, read this article.

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