I am 27 years and reside in Mangaluru. I have been investing in a very good ELSS scheme through SIP to save tax. I had invested INR 15,000 a month in 12 installments ending 15th July 2016. I need money badly and want to withdraw my money from this scheme. I know about the 3-year lock-in, but is it possible to sell the units and withdraw my money after paying some kind of penalty? Can I sell the units and transfer money to my bank account?
ELSS are equity schemes that invest most of their corpus in stocks. You can get a tax deduction up to INR 1.5 Lakhs a year under Section 80C if you invest in ELSS, a type of mutual fund. SIPs allow you to invest at different levels of the stock market. The stock markets will invariably be at different levels on the date of your monthly SIP, allowing you to average out your investment in the ELSS scheme. When the stock markets will be low, you will be able to get more units. And vice versa. You get the benefit of rupee cost averaging. You have invested INR 15,000 a month which is INR 1.8 Lakhs a year from 15th July 2015 until 15th July 2016. Your investment is locked for 3 years starting from the date of investment. So, your investments will start getting unlocked in August 2018, and all the units allocated over the 12 installments would be fully unlocked by July 2019. No, you cannot redeem units of the ELSS scheme before August 2018 even if you switch/pay a penalty.