InvestorQ : Do I have to pay any penalty if I withdraw money from ELSS funds before 3 years?
Suresh Patil made post

Do I have to pay any penalty if I withdraw money from ELSS funds before 3 years?

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Gauravi Patel answered.
1 week ago
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Equity Linked Savings Scheme or ELSS funds are a great option for Tax saving. However, they come with a mandatory lock-in period of 3 years. Owing to this, investors can not withdraw money before the completion of 3 years. The lock-in period applies to the units you have purchased, irrespective of the value of the investment at the time of redemption. The lock-in begins from the date of purchase.

If you have a SIP in an ELSS fund, every installment is considered as a separate investment, and thus each amount will have its lock-in period. If you have an ongoing SIP in an ELSS Mutual Fund and require to stop it, you can do that. But, redeeming the existing invested units before three years from the date of investment is not possible in the case of ELSS. Since premature withdrawal is unavailable, there is no penalty levied on the investor.

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