POSTED BY January 10, 2015 8:09 am ONE COMMENT
ONtax saving funds are having a lock in period of 3 year.If i invest every year in tax saving fund how the lock in period work, is it extended to 3 more year for the Ist year investments also or can I redeem ist year investment after 3 year.please elaborate
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Dear sdharmadhikari,
The lock-in is for each instalment. For example if you start a 1 year monthly SIP for Rs. 10,000/- starting 1 Jan 2015, then the first instalment will be locked till 1 Jan 2018, second instalment (made in 1 Feb 2015) will be locked till 1 Feb 2018 and so on. The lock in is based on the units accumulated and not the amount. For example if you receive 50 units for the 10,000/- that you invest in 1st Jan 2015, the same might have become, say 15,000/- by 1 Jan 2018 and you will be able to redeem/withdraw equivalent of 50 units (assuming growth option here) or Rs. 15,000/- by 1st Jan 2018