What is the penalty for withdrawing from ELSS before 3 years?

I am investing in ELSS for tax benefits. It says there is a lock-in of 3 years. If I have an emergency and need to withdraw money, what will be the penalty?


Equity Linked Saving Scheme (ELSS) has a lock-in period of 3 years. The amount invested cannot be withdrawn before the completion of this lock-in period.

An ongoing SIP in ELSS can be stopped. However, redeeming the invested amount before the completion of 3 years is not possible in the case of ELSS.

Mridul Agrawal

Equity Linked Savings Scheme or ELSS is a type of mutual fund wherein a major portion out of the total fund is invested in equity and related products. As evident from the name of the scheme, it comes with a benefits attached to it, in the form of tax savings.

Two important features of the ELSS scheme are lock-in period and Net Asset Value (NAV) or price of the fund which is declared at the end of each business day.

Lock- in period – Unlike other mutual fund schemes, ELSS is different from the sense that there is a minimum lock-in period of 3 years in any/all ELSS schemes. Under ELSS schemes, premature withdrawal is not allowed before the completion of lock-in period. 

As mentioned ELSS funds cannot be withdrawn before a lock-in period of 3 years, therefore the option of premature withdrawal is not available to the investor, thereby no penalty is possible in this case.


ELSS investments are locked-in for 3 years. So, you can't withdraw it before 3 years under any circumstances. 

Check this for more details on ELSS: https://groww.in/blog/understanding-elss-mutual-funds/

If you really need money, you can take loan with mutual funds units as lien.

Hope this helps


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