Within the same fund house, is it permissible to directly switch investments from an ELSS (Equity Linked Savings Scheme) to a non-tax-saving fund, considering the lock-in period and SEBI regulations?

Unfortunately, switching directly from an ELSS (Equity Linked Savings Scheme) to a non-tax-saving fund within the same fund house is not possible due to the following reasons:

1. Lock-in Period: ELSS funds come with a mandatory lock-in period of 3 years from the date of investment. This means you cannot redeem your units or switch them to another fund before the lock-in period ends.
2. SEBI Regulations: The Securities and Exchange Board of India (SEBI) regulations prevent fund houses from offering two different fund plans under the same category. Since both ELSS and the non-tax-saving fund belong to the equity category, this rule applies.

However, you have other options to achieve your desired outcome:

1. Redeem and Reinvest:

• You can redeem your ELSS units after the lock-in period expires. This will incur exit load charges as per the fund’s scheme document.
• With the redeemed amount, you can then invest in the non-tax-saving fund of your choice.

2. Systematic Transfer Plan (STP):

• Some fund houses offer STPs within their own schemes. However, STPs are typically allowed between different categories of funds, not within the same category. Check if the specific fund house you’re interested in offers STPs between ELSS and non-tax-saving funds.

3. Invest in Similar Non-ELSS Fund:

• You can choose a non-ELSS fund with similar investment objectives and portfolio characteristics as the ELSS you hold.

4. Seek Professional Advice:

• Consult a financial advisor to discuss your specific financial goals and assess the most suitable investment options based on your risk tolerance and investment horizon.

Remember, switching investments may have tax implications based on your individual circumstances. Consult a tax advisor for guidance on potential tax liabilities associated with different options.