Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Exit load is a fee charged by mutual funds when investors redeem units within a specified period after purchase.
If you sell a mutual fund too soon, the fund house may deduct a small penalty called exit load from your redemption amount.
Exit loads discourage short-term trading that disrupts portfolio management and protects long-term unitholders. Loads are credited to the scheme or AMC per offer document. Liquid and many debt funds often have zero exit load.
A fund charges 1% exit load if redeemed within 1 year. Redeeming ₹1,00,000 worth of units within 6 months costs ₹1,000, netting you ₹99,000 before taxes.
Equity funds often charge 1% for redemptions within 1 year. Debt funds may have shorter periods or none. Always check the scheme information document.
Exit load is not a separate tax deduction. It reduces redemption proceeds, indirectly affecting capital gains calculation.
Exit load is scheme-specific, not plan-specific. Direct and regular plans of the same scheme share identical exit load rules.