NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Scheme Related Information
An investor invests Rs 1,00,000 in an ELSS scheme through a lump sum on 1 June 2024. Which statement about the lock-in is correct?
ELSS units have a statutory lock-in of three years from the date of allotment, regardless of whether the investor chooses the growth or dividend option. So units bought on 1 June 2024 can be redeemed only after the three years have elapsed.
- AUnits can be redeemed any time after 1 year
- BUnits can be redeemed after 3 years from the date of allotmentCorrect
- CUnits can be redeemed after 5 years from the date of allotment
- DThere is no lock-in if the investor opts for the dividend option
Explanation
ELSS units carry a mandatory lock-in of 3 years from the date of allotment of units. The lock-in applies irrespective of the growth or dividend option. Five years is the lock-in for tax-saving bank fixed deposits, not ELSS.
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