Ask ET Mutual Funds: Can I redeem all my mutual fund schemes in one month?

I have two Tata Mid Cap Growth Funds - Dividend (Both have same 776.339 Units each), two Tata Large Cap Funds - Dividend (Both have same 419.790 Units each), one HDFC Top 200 Fund - Dividend (937.207 Units), one HDFC Tax Saver - Growth (245.328 Units), one HDFC Income Fund - Growth (693.842 Units), two DSP BlackRock Small & Mid Cap Fund - Dividend (Both have same 977.995 Units each), one DSP Black Rock Small & Mid Cap Fund - Growth ( 977.995 Units), one SBI Magnum Mid Cap Fund - Dividend (500 Units), two Birla Sun Life Tax Relief '96 Funds - ELSS - Dividend (Both have same 156.887 Units). All Mutual Funds are Regular Plan. I have these mutual funds for nine years now. I want to redeem them within one month. Can I redeem all of them within one month? When can I redeem them?

--Zubin

Nisreen Mamaji, Founder-Chief Planner, MoneyWorks Financial Advisors, responds:

If I have understood you correctly, you wish to enquire about the redemption process of your investments. Yes, you may redeem all the funds except the HDFC Tax Saver and Birla Sunlife Tax Relief ’96 Fund. All the others are open-ended and you will receive the funds into your account on the fourth day of submission of the redemption slip to the AMC or the registrar. If you have opted for direct credit, the redemption amount will be credited to your account; else you will receive a cheque by courier. Since all these investments are held over one year, there will be no tax liability.


As far as the ELSS funds go, please reconfirm whether you have completed the lock-in period of three years on each purchase. If yes, you can follow the same process mentioned above to redeem them. If not, you must complete the lock-in periods of each purchase in those funds before redeeming them.

HDFC Income Fund is a debt fund. It would qualify for long-term capital gains tax of 20 per cent with indexation if the holding period is 36 months. If you hold it for less than 36 months, the gains would be treated as short-term capital gains. It would be added to your income and taxed as per the Income Tax slab applicable to you.


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