{"id":3153,"date":"2025-03-05T12:31:13","date_gmt":"2025-03-05T07:01:13","guid":{"rendered":"https:\/\/www.torusdigital.com\/toruscope\/?p=3153"},"modified":"2025-07-21T16:16:20","modified_gmt":"2025-07-21T10:46:20","slug":"what-is-mutual-fund-redemption","status":"publish","type":"post","link":"https:\/\/www.torusdigital.com\/toruscope\/demat-account\/what-is-mutual-fund-redemption\/","title":{"rendered":"What is Mutual Fund Redemption, and How Do You Redeem the Units?"},"content":{"rendered":"<div class=\"wpb-content-wrapper\"><p>[vc_section el_id=&#8221;blog-inner-layout&#8221;][vc_row overlay_dotted=&#8221;&#8221;][vc_column el_class=&#8221;blog_primary&#8221;][vc_row_inner][vc_column_inner][vc_column_text css=&#8221;&#8221;]Mutual funds are a common investment option for both beginner and expert investors. It offers numerous benefits, including professional management of funds, diversification of risk, and liquidity.<\/p>\n<p>When investing in mutual funds, you must learn about its liquidation period and the process to redeem the funds. Redeeming mutual funds can be complex due to various factors involved. Without sufficient knowledge, investors may face financial challenges, making it essential to understand the process thoroughly.<\/p>\n<p><strong>Mutual fund redemption<\/strong> is essential to address financial emergencies or to achieve personal financial goals. This blog helps you to understand <strong>what mutual fund redemption is<\/strong> and the general procedure.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Understanding_Mutual_Fund_Redemption\"><\/span>Understanding Mutual Fund Redemption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><strong>Mutual fund redemption<\/strong> entails the selling of mutual fund units from a particular fund. It is the process of liquidating the holdings and converting them into cash. Investors sell their mutual fund units to the respective asset management company (AMC) to receive the returns. Investors can redeem a portion of their investment or the whole corpus of a mutual fund.<\/p>\n<p>If you submit your redemption application with the fund house before 3 pm on trading days, then the same day&#8217;s Net Asset Value (NAV) will be considered as the redemption amount. If you submit the request after 3 pm, you will get the NAV the next day. This redemption plays an important role in managing investment portfolios. It allows investors to manage their holdings based on their financial performance.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Different_Types_of_Mutual_Funds_Redemption\"><\/span>Different Types of Mutual Funds Redemption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The units of a mutual fund can be redeemed in different ways. These are three common ways to redeem the mutual funds:<\/p>\n<ul>\n<li><strong>Unit-Based Redemption:<\/strong> A unit-based redemption allows you to redeem your desired number of mutual funds units. The redemption amount will depend on the total number of mutual fund units you want to redeem and the current NAV of a mutual fund unit.<\/li>\n<li><strong>Amount-Based Redemption:<\/strong> With amount-based redemption, you can specify the exact amount you would like to redeem. The system will then automatically calculate and debit the corresponding number of units based on the current Net Asset Value (NAV), ensuring you receive your desired amount.<\/li>\n<li><strong>Redeem All:<\/strong> You can redeem your total investments in mutual funds in this type of redemption.<\/li>\n<li><strong>Systematic Withdrawal Plan:<\/strong> This process allows you to redeem a fixed amount of money or units from your mutual fund at regular intervals, providing a steady and predictable income stream. This convenient option helps you withdraw a specific amount regularly, ensuring a consistent flow of funds.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Difference_Between_Mutual_Fund_Redemption_and_Stock_Selling\"><\/span>Difference Between Mutual Fund Redemption and Stock Selling<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Although mutual fund redemption and stock selling may seem similar, they are fundamentally different processes.<\/p>\n<p>When redeeming mutual funds, the mutual fund house itself acts as the buyer, purchasing the units from you at the current NAV. The transaction is typically processed, and the funds are credited to your account within 3 to 4 business days.<\/p>\n<p>On the other hand, selling stocks operates differently. Stocks are sold in the open market, where individual buyers and sellers agree upon a price. The sale occurs when a buyer is willing to purchase the shares at the market price, which can fluctuate based on demand and supply dynamics.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_Should_You_Redeem_Mutual_Funds\"><\/span>When Should You Redeem Mutual Funds?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><!--?h2 &gt;&lt;br ?-->You should not redeem your mutual fund unit without any proper reason. Below are some of the reasons for which you can redeem a mutual fund:<\/p>\n<ul>\n<li><strong>Completing Financial Goals:<\/strong> You can go for mutual fund redemption after you have achieved your financial goals. If you have been investing for a long period and have reached your target amount, you have the option to either redeem the mutual fund or continue investing. Redeeming is often the choice after the predetermined investment tenure has ended and you have achieved the desired corpus.<\/li>\n<li><strong>Poor Performance:<\/strong> Consider redeeming your mutual fund if it has continuously underperformed the benchmark for a specific period. Redeeming your mutual fund can be a better option in this situation because this can negatively impact your financial objectives.<br \/>\nReview the performance of your investments and assess whether switching to a better-performing fund might help you achieve your goals more effectively.<\/li>\n<li><strong>Financial Emergencies:<\/strong> A financial emergency is a situation where you need access to funds quickly. These funds can be used to handle various emergencies, including medical emergencies. If you have invested in liquid funds, these can be redeemed promptly to provide immediate liquidity, helping you navigate such emergencies.<\/li>\n<li><strong>Market Volatility:<\/strong> Some investors choose to redeem their mutual funds during periods of market downturns, aiming to protect themselves from potential losses. Although it is a risky strategy for long-term investors, this approach can help you avoid short-term fluctuations.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Tax_Implications_of_Mutual_Fund_Redemption\"><\/span>Tax Implications of Mutual Fund Redemption<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The gains and profits associated with the withdrawal of mutual funds are taxable. The following details show tax implications in <strong>mutual fund redemption<\/strong>:<\/p>\n<ul>\n<li>A short-term capital gain (STCG) tax is applicable for the redemption process if the investment tenure is less than one year. 20% of STCG is applied in this case.<\/li>\n<li>If you make a profit of more than \u20b91.25 lakh, long-term capital gain (LTCG) tax is applied. You have to pay a 12.5% flat rate if your investment tenure exceeds one year.<\/li>\n<li>For debt-based mutual funds, tax is charged based on the investor\u2019s tax slab rate.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Charges_Applicable_While_Redeeming_Mutual_Fund\"><\/span>Charges Applicable While Redeeming Mutual Fund<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>If you have decided to redeem your mutual funds, then you must be aware of all the charges associated with <strong>mutual fund redemption<\/strong>. Below are two of the common charges that investors pay while redeeming the mutual funds:<\/p>\n<ul>\n<li><strong>Exit Load:<\/strong> An exit load is a charge that investors pay to the AMCs during withdrawal from a mutual fund scheme. The reason behind imposing this charge is to retain the customers for a minimum period and dissuade them from exiting the scheme. Once you exit from a fund before the particular tenure, you have to pay a certain percentage of the withdrawn amount as exit load.<br \/>\nYou should remember that different mutual fund schemes impose different fees as an exit load. Also, some mutual fund schemes do not impose any exit load on investors.<\/li>\n<li><strong>Expense Ratio:<\/strong> While it is not charged when redeeming the funds, the expense ratio is deducted from the total value of the investment. It is a fee paid to the AMC for managing and operating a mutual fund scheme.<br \/>\nThis charge includes sales and marketing expenses, distribution fees, administration fees, and fund manager\u2019s charges.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Steps_for_Mutual_Fund_Redemption_Online\"><\/span>Steps for Mutual Fund Redemption Online<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>You can use brokerage platforms like Torus Digital to invest and redeem funds. Torus Digital offers a variety of mutual fund schemes starting with just \u20b9100. Follow these simple steps to redeem mutual funds online using the Torus Digital app:<\/p>\n<ul>\n<li><strong>Step 1:<\/strong> Open the Torus Digital application and navigate to the \u2018Mutual Funds\u2019 section.<\/li>\n<li><strong>Step 2:<\/strong> Select your mutual fund scheme and choose the number of units or specific amount you want to redeem.<\/li>\n<li><strong>Step 3:<\/strong> Enter your TPIN to authorise the transaction.<\/li>\n<li><strong>Step 4:<\/strong> The amount will be deposited in your account once your mutual fund transaction is completed. You can also receive the amount in your demat-linked bank account.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Steps_for_Mutual_Fund_Redemption_Offline\"><\/span>Steps for Mutual Fund Redemption Offline<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Investors also have the option to withdraw amounts from their mutual funds scheme offline. Follow the below instructions to redeem the mutual funds physically:<\/p>\n<ol>\n<li><strong>Step 1:<\/strong> Collect or download a <strong>mutual fund redemption<\/strong> request form from your AMC. Enter all the necessary details and the number of units you want to redeem from the scheme.<\/li>\n<li><strong>Step 2:<\/strong> After filling in the details, sign the form and submit it to the AMC or the designated Registrar&#8217;s office<\/li>\n<li><strong>Step 3:<\/strong> You will receive the proceeds from the redemption in your registered bank account within a few business days.<\/li>\n<\/ol>\n<h2><span class=\"ez-toc-section\" id=\"How_Much_Time_Will_It_Take_to_Receive_Your_Mutual_Fund_Amount\"><\/span>How Much Time Will It Take to Receive Your Mutual Fund Amount?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The redemption time for mutual funds may vary from fund to fund.<\/p>\n<ul>\n<li>If you have invested in debt funds, then you will receive the amount after two to three days of the redemption.<\/li>\n<li>If you have selected any liquid fund for your investment, then it will take a maximum of two days for the amount to be credited to your bank account.<\/li>\n<li>However, for some equity-based mutual funds, the <strong>mutual fund redemption<\/strong> time can take up to three to four working days.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Things_to_Remember_While_Redeeming_Mutual_Funds\"><\/span>Things to Remember While Redeeming Mutual Funds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The process of redeeming mutual funds is not as easy as it looks. Just like you evaluate a lot of things before choosing a mutual fund for your investment, you must do the same for the redemption process. Follow the below steps to avoid mistakes in the redemption procedure:<\/p>\n<ul>\n<li>Before redeeming your mutual fund units, ensure that you are fully aware of your financial needs and obligations. This helps you to realise whether it is good for you to redeem those funds.<\/li>\n<li>Avoid redeeming the funds just because you have seen enough returns. Ensure that you have a valid reason for doing so, such as funding an important life event (e.g., education, a vacation) or addressing a financial emergency (e.g., medical expenses). A well-defined purpose will guide your decision.<\/li>\n<li>In case you are experiencing a bearish trend in the market, then avoid exiting the mutual fund. Exiting during a downturn may prevent you from benefiting when the market eventually recovers, potentially limiting your long-term gains.<\/li>\n<li>Before redeeming your mutual funds, familiarise yourself with the current Net Asset Value (NAV) of the fund, as this will determine the redemption amount.<\/li>\n<li>Understand the tax implications of your redemption and any applicable exit load charges.<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Final_Thoughts\"><\/span>Final Thoughts<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Understanding <strong>mutual fund redemption<\/strong> meaning is necessary if you want to invest in a mutual fund. When redeeming mutual funds, investors should be aware of charges such as the exit load and expense ratio, which can affect their returns. The <strong>mutual fund redemption<\/strong> process can be done using various methods such as unit-based redemption, amount-based redemption, or SWP.<\/p>\n<p>Investors can sell their mutual fund units both online and offline. For a seamless and efficient investment experience, consider using the Torus Digital application.<\/p>\n<p>With Torus Digital, you can access a wide range of mutual fund schemes starting from just \u20b9100 and enjoy numerous benefits for managing your investments online.<br \/>\n[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_row_inner el_id=&#8221;share_rating&#8221;][vc_column_inner width=&#8221;1\/2&#8243;][vc_column_text css=&#8221;&#8221;]<\/p>\n<h6>Rate this article<\/h6>\n<!-- FeedbackWP Plugin --><div  class=\"rmp-widgets-container rmp-wp-plugin rmp-main-container js-rmp-widgets-container js-rmp-widgets-container--3153 \"  data-post-id=\"3153\">    <!-- Rating widget -->  <div class=\"rmp-rating-widget js-rmp-rating-widget\">            <div class=\"rmp-rating-widget__icons\">      <ul class=\"rmp-rating-widget__icons-list js-rmp-rating-icons-list\">                  <li class=\"rmp-rating-widget__icons-list__icon js-rmp-rating-item\" data-descriptive-rating=\"Terrible!\" data-value=\"1\">              <i class=\"js-rmp-rating-icon rmp-icon rmp-icon--ratings rmp-icon--star \"><\/i>          <\/li>                  <li class=\"rmp-rating-widget__icons-list__icon js-rmp-rating-item\" data-descriptive-rating=\"Bad!\" data-value=\"2\">              <i class=\"js-rmp-rating-icon rmp-icon rmp-icon--ratings rmp-icon--star \"><\/i>          <\/li>                  <li class=\"rmp-rating-widget__icons-list__icon js-rmp-rating-item\" data-descriptive-rating=\"Okay!\" data-value=\"3\">              <i class=\"js-rmp-rating-icon rmp-icon rmp-icon--ratings rmp-icon--star \"><\/i>          <\/li>                  <li class=\"rmp-rating-widget__icons-list__icon js-rmp-rating-item\" data-descriptive-rating=\"Good!\" data-value=\"4\">              <i class=\"js-rmp-rating-icon rmp-icon rmp-icon--ratings rmp-icon--star \"><\/i>          <\/li>                  <li class=\"rmp-rating-widget__icons-list__icon js-rmp-rating-item\" data-descriptive-rating=\"Great!\" data-value=\"5\">              <i class=\"js-rmp-rating-icon rmp-icon rmp-icon--ratings rmp-icon--star \"><\/i>          <\/li>              <\/ul>    <\/div>    <p class=\"rmp-rating-widget__hover-text js-rmp-hover-text\"><\/p>    <button class=\"rmp-rating-widget__submit-btn rmp-btn js-submit-rating-btn\">      Submit Rating    <\/button>    <p class=\"rmp-rating-widget__results js-rmp-results rmp-rating-widget__results--hidden\">       <span class=\"rmp-rating-widget__results__rating js-rmp-avg-rating\">0<\/span> \/ 5.  <span class=\"rmp-rating-widget__results__votes js-rmp-vote-count\">0<\/span>    <\/p>    <p class=\"rmp-rating-widget__not-rated js-rmp-not-rated \">          <\/p>    <p class=\"rmp-rating-widget__msg js-rmp-msg\"><\/p>  <\/div>  <!--Structured data -->        <\/div>\n<div id=\"emoji-overlay\" style=\"display: none;\">\n<div id=\"overlay-emoji\"><\/div>\n<div id=\"overlay-description\" class=\"emoji-text\"><\/div>\n<\/div>\n<div id=\"rating-popup\">\n<p><span id=\"popup-close\">\u00d7<\/span><\/p>\n<div class=\"popup_message\">\n<div id=\"popup-emoji\"><\/div>\n<div class=\"popup_innermsg\">\n<h5>Thank You for Rating Our Article!<\/h5>\n<p>Your feedback is incredibly valuable to us, and we&#8217;re thrilled to hear your thoughts.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<p>[\/vc_column_text][\/vc_column_inner][vc_column_inner width=&#8221;1\/2&#8243;][vc_column_text css=&#8221;&#8221;]<\/p>\n<h6>Share this article<\/h6>\n<div class=\"cscra-social square cscra-socials-679c8a1122c00\">\n        <a href=\"\/\/www.facebook.com\/sharer\/sharer.php?u=https%3A%2F%2Fwww.torusdigital.com%2Ftoruscope%2Fdemat-account%2Fwhat-is-mutual-fund-redemption%2F&t=What+is+Mutual+Fund+Redemption%2C+and+How+Do+You+Redeem+the+Units%3F\" class=\"facebook\" data-toggle=\"tooltip\" data-placement=\"top\" title=\"Share On Facebook\" target=\"_blank\"><i class=\"fa fa-facebook\"><\/i><\/a>\n        <a href=\"\/\/twitter.com\/intent\/tweet?text=What+is+Mutual+Fund+Redemption%2C+and+How+Do+You+Redeem+the+Units%3F&url=https%3A%2F%2Fwww.torusdigital.com%2Ftoruscope%2Fdemat-account%2Fwhat-is-mutual-fund-redemption%2F\" class=\"twitter\" data-toggle=\"tooltip\" data-placement=\"top\" title=\"Share On Twitter\" target=\"_blank\"><i class=\"fa-brands fa-x-twitter\"><\/i><\/a>\n        <a href=\"https:\/\/api.whatsapp.com\/send?text=What+is+Mutual+Fund+Redemption%2C+and+How+Do+You+Redeem+the+Units%3F - https%3A%2F%2Fwww.torusdigital.com%2Ftoruscope%2Fdemat-account%2Fwhat-is-mutual-fund-redemption%2F\" class=\"whatsapp\" data-toggle=\"tooltip\" data-placement=\"top\" title=\"Share On WhatsApp\" target=\"_blank\"><i class=\"fa fa-whatsapp\"><\/i><\/a>\n        <a href=\"\/\/www.linkedin.com\/shareArticle?mini=true&url=https%3A%2F%2Fwww.torusdigital.com%2Ftoruscope%2Fdemat-account%2Fwhat-is-mutual-fund-redemption%2F&title=What+is+Mutual+Fund+Redemption%2C+and+How+Do+You+Redeem+the+Units%3F\" class=\"linkedin\" data-toggle=\"tooltip\" data-placement=\"top\" title=\"Share On Linkedin\" target=\"_blank\"><i class=\"fa fa-linkedin\"><\/i><\/a>\n    <\/div>[\/vc_column_text][\/vc_column_inner][\/vc_row_inner][vc_row_inner el_id=&#8221;faq_blog&#8221;][vc_column_inner][vc_custom_heading text=&#8221;Frequently Asked Questions&#8221; font_container=&#8221;tag:h2|text_align:left|color:%23001316&#8243; use_theme_fonts=&#8221;yes&#8221; css=&#8221;&#8221;][\/vc_column_inner][\/vc_row_inner][vc_tta_accordion active_section=&#8221;1&#8243; el_id=&#8221;faq&#8221;][vc_tta_section title=&#8221;Should I have to pay tax after mutual fund redemption?&#8221; tab_id=&#8221;1741084133227-8bcfa4c5-0fa3&#8243;][vc_column_text css=&#8221;&#8221;]Yes, profits from mutual fund redemptions are taxable. If you redeem your investment within one year, a 20% Short-Term Capital Gains (STCG) tax applies. For redemptions after one year, a 12.5% Long-Term Capital Gains (LTCG) tax is levied on gains exceeding \u20b91.25 lakh.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=&#8221;How do you avoid tax while redeeming a mutual fund?&#8221; tab_id=&#8221;1741084133247-2a4cfc81-fdd1&#8243;][vc_column_text css=&#8221;&#8221;]You can save on paying tax during the redemption of mutual funds by investing in them for a longer duration and qualifying for Long-Term Capital Gains (LTCG) tax. Another way to save on paying taxes is to invest in tax-saving funds like ELSS funds. These can offer tax benefits under section 80C of the Income Tax Act.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=&#8221;What are the tax calculations in mutual fund redemption?&#8221; tab_id=&#8221;1741084264816-a99716aa-062d&#8221;][vc_column_text css=&#8221;&#8221;]Both STCG and LTCG taxes are applicable for mutual fund redemption. Investors must pay 20% of STCG if their investment tenure is less than one year. In case they have invested over one year and make a profit of \u20b91.25 lakh or above, they have to pay 12.5% of LTCG tax. [\/vc_column_text][\/vc_tta_section][vc_tta_section title=&#8221;Is it possible to withdraw only a portion of my investment in mutual funds?&#8221; tab_id=&#8221;1741084286999-7d3f4375-0a0b&#8221;][vc_column_text css=&#8221;&#8221;]Yes, you can withdraw only a portion of your mutual fund by selling a specific number of units from the fund. This process is known as partial withdrawal. You can also completely exit from the mutual fund scheme by selling all of your units.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=&#8221;Does the redemption of mutual funds have a lock-in period?&#8221; tab_id=&#8221;1741086903470-e68d8d3f-3b9b&#8221;][vc_column_text css=&#8221;&#8221;]Only ELSS schemes and other closed-ended mutual funds have a lock-in period. The ELSS schemes have a mandatory lock-in period of three years.[\/vc_column_text][\/vc_tta_section][vc_tta_section title=&#8221;What is the mutual fund redemption cut-off time?&#8221; tab_id=&#8221;1741158021156-862c091e-8812&#8243;][vc_column_text css=&#8221;&#8221;]For equity-based mutual funds, the cut-off time for redemption is 3:00 pm on business days. Orders received before this time will be processed based on the applicable Net Asset Value (NAV) of the same day.[\/vc_column_text][\/vc_tta_section][\/vc_tta_accordion][\/vc_column][\/vc_row][\/vc_section]<\/p>\n<p><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"BlogPosting\",\"mainEntityOfPage\":{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.torusdigital.com\/toruscope\/demat-account\/what-is-mutual-fund-redemption\/\"},\"headline\":\"Mutual Fund Redemption: How to Redeem Your Funds Online?\",\"description\":\"Learn how mutual fund redemption works in India. Understand the step-by-step process, exit load, applicable taxes and timelines for receiving the redemption amount.\",\"image\":\"https:\/\/www.torusdigital.com\/toruscope\/wp-content\/uploads\/2025\/03\/What-is-Mutual-Fund-Redemption-1.jpg\",\"author\":{\"@type\":\"Organization\",\"name\":\"Torus Digital\",\"url\":\"https:\/\/www.torusdigital.com\/\"},\"publisher\":{\"@type\":\"Organization\",\"name\":\"Torus Digital\",\"logo\":{\"@type\":\"ImageObject\",\"url\":\"https:\/\/dl4mfd6uvl13t.cloudfront.net\/static\/images\/webp\/logo.webp\"}},\"datePublished\":\"05-03-2025\",\"dateModified\":\"21-07-2025\"}<\/script><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\/\",\"@type\":\"BreadcrumbList\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.torusdigital.com\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Toruscope\",\"item\":\"https:\/\/www.torusdigital.com\/toruscope\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Banking\",\"item\":\"https:\/\/www.torusdigital.com\/toruscope\/demat-account\/\"},{\"@type\":\"ListItem\",\"position\":4,\"name\":\"Mutual Fund Redemption: Process, Taxation & Key Things to Know\",\"item\":\"https:\/\/www.torusdigital.com\/toruscope\/demat-account\/what-is-mutual-fund-redemption\/\"}]}<\/script><meta property=\"og:title\" content=\"Mutual Fund Redemption: How to Redeem Your Funds Online?\"><meta property=\"og:site_name\" content=\"Torus Digital\"><meta property=\"og:url\" content=\"https:\/\/www.torusdigital.com\/toruscope\/demat-account\/what-is-mutual-fund-redemption\/\"><meta property=\"og:description\" content=\"Learn how mutual fund redemption works in India. Understand the step-by-step process, exit load, applicable taxes and timelines for receiving the redemption amount.\"><meta property=\"og:type\" content=\"website\"><meta property=\"og:image\" content=\"https:\/\/www.torusdigital.com\/toruscope\/wp-content\/uploads\/2025\/03\/What-is-Mutual-Fund-Redemption-1.jpg\"><meta name=\"twitter:card\" content=\"summary\"><meta name=\"twitter:site\" content=\"Torus Digital\"><meta name=\"twitter:title\" content=\"Mutual Fund Redemption: How to Redeem Your Funds Online?\"><meta name=\"twitter:url\" content=\"https:\/\/www.torusdigital.com\/toruscope\/demat-account\/what-is-mutual-fund-redemption\/\"><meta name=\"twitter:description\" content=\"Learn how mutual fund redemption works in India. Understand the step-by-step process, exit load, applicable taxes and timelines for receiving the redemption amount.\"><meta name=\"twitter:image\" content=\"https:\/\/www.torusdigital.com\/toruscope\/wp-content\/uploads\/2025\/03\/What-is-Mutual-Fund-Redemption-1.jpg\"><script type=\"application\/ld+json\">{\"@context\":\"https:\/\/schema.org\",\"@type\":\"FAQPage\",\"mainEntity\":[{\"@type\":\"Question\",\"name\":\"Should I have to pay tax after mutual fund redemption?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes, profits from mutual fund redemptions are taxable. If you redeem your investment within one year, a 20% Short-Term Capital Gains (STCG) tax applies. For redemptions after one year, a 12.5% Long-Term Capital Gains (LTCG) tax is levied on gains exceeding \u20b91.25 lakh.\"}},{\"@type\":\"Question\",\"name\":\"How do you avoid tax while redeeming a mutual fund?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"You can save on paying tax during the redemption of mutual funds by investing in them for a longer duration and qualifying for Long-Term Capital Gains (LTCG) tax. Another way to save on paying taxes is to invest in tax-saving funds like ELSS funds. These can offer tax benefits under section 80C of the Income Tax Act.\"}},{\"@type\":\"Question\",\"name\":\"What are the tax calculations in mutual fund redemption?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Both STCG and LTCG taxes are applicable for mutual fund redemption. Investors must pay 20% of STCG if their investment tenure is less than one year. In case they have invested over one year and make a profit of \u20b91.25 lakh or above, they have to pay 12.5% of LTCG tax.\"}},{\"@type\":\"Question\",\"name\":\"Is it possible to withdraw only a portion of my investment in mutual funds?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Yes, you can withdraw only a portion of your mutual fund by selling a specific number of units from the fund. This process is known as partial withdrawal. You can also completely exit from the mutual fund scheme by selling all of your units.\"}},{\"@type\":\"Question\",\"name\":\"Does the redemption of mutual funds have a lock-in period?\",\"acceptedAnswer\":{\"@type\":\"Answer\",\"text\":\"Only ELSS schemes and other closed-ended mutual funds have a lock-in period. The ELSS schemes have a mandatory lock-in period of three years.\"}}]}<\/script><\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"[vc_section el_id=&#8221;blog-inner-layout&#8221;][vc_row overlay_dotted=&#8221;&#8221;][vc_column el_class=&#8221;blog_primary&#8221;][vc_row_inner][vc_column_inner][vc_column_text css=&#8221;&#8221;]Mutual funds are a common investment option for both beginner and expert investors. It offers numerous benefits, including professional management of funds, diversification of risk, and liquidity. When investing in mutual funds, you must learn about its liquidation period and the process to redeem the funds. Redeeming mutual funds can be","protected":false},"author":1,"featured_media":4553,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_sitemap_exclude":false,"_sitemap_priority":"","_sitemap_frequency":"","footnotes":""},"categories":[147],"tags":[],"class_list":["post-3153","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-demat-account"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Mutual Fund Redemption: How to Redeem Your Funds Online?<\/title>\n<meta name=\"description\" content=\"Mutual fund redemption is essential to address financial emergencies. 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