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Investing

How to Redeem a Mutual Fund: Exit Load and Payout Time

Redeem through the fund house, registrar or your platform. A request by 3 pm gets that day's NAV, and the money must arrive within 3 working days.

RM

Written by Rohan Mehta

Published 22 October 2026·7 min read

On this page8 sections
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To redeem a mutual fund, place a redemption request with the fund house, its registrar (CAMS or KFintech), MF Central or the platform you invested through. A request made by 3 pm on a business day usually gets that day’s NAV. Any exit load is deducted from the proceeds, and the money must reach your bank within 3 working days (5 for schemes with at least 80% in overseas investments).

Key facts

Item Rule
Cut-off time (most schemes) 3 pm on a business day for that day’s closing NAV; after 3 pm, the next business day’s NAV
Cut-off time (liquid and overnight funds) 3 pm for the NAV of the day before the next business day; 7 pm for online overnight fund requests
Payout timeline Within 3 working days; 5 working days for schemes with at least 80% in permissible overseas investments
Late payment Fund house pays 15% a year interest for the delay
Exit load cap 3% of NAV for open-ended schemes, under the SEBI (Mutual Funds) Regulations, 2026
Minimum redemption Set by each scheme; some allow any amount

The Mutual Funds Regulations, 2026 replaced the 1996 regulations on 1 April 2026. They cut the exit load ceiling from 5% to 3% and require all exit load collected to be credited back to the scheme.

How to redeem online: fund house, registrar or platform

Use the channel that holds your units. Units bought directly or through a distributor sit in a folio with the fund house. Units bought through a stock broker may sit in your demat account.

Units held in a folio

  1. Log in to the fund house website or app, the registrar’s investor site (CAMS or KFintech), MF Central, or the platform where you invested.
  2. Select the folio and scheme, then choose Redeem.
  3. Enter the amount in rupees, the number of units, or choose to redeem all units.
  4. Confirm the bank account registered on the folio.
  5. Authenticate with the OTP and submit. Note the time-stamp on the confirmation, as it decides your NAV.

If you enter both an amount and a number of units, JM Financial Mutual Fund’s Statement of Additional Information says the lower value is used. For an amount-based request, extra units are sold to cover the exit load and any securities transaction tax (STT), so you receive the amount you asked for. Physical requests signed by all holders can also be lodged at an investor service centre.

Units held in demat

  1. Place a redemption order through your broker’s app, or approach your depository participant (DP).
  2. If you go through the DP, fill in the Redemption/Repurchase Request Form it provides. Use the ISIN printed on your statement.
  3. The DP blocks the units in the NSDL or CDSL system and sends an electronic request to the registrar.
  4. Requests generated by the 3 pm cut-off (7 pm for overnight funds) are processed at that day’s applicable NAV.

Which NAV you get

SEBI’s cut-off rules decide the NAV, based on when your request is time-stamped:

Scheme type Request by cut-off Request after cut-off
Equity, debt and hybrid (other than liquid and overnight) Closing NAV of the same business day (cut-off 3 pm) Closing NAV of the next business day
Liquid funds Closing NAV of the day before the next business day (cut-off 3 pm) Closing NAV of the next business day
Overnight funds Same as liquid funds; cut-off 3 pm offline, 7 pm online Closing NAV of the next business day

The 7 pm online cut-off for overnight funds applies from 1 June 2025, under SEBI’s circular of 22 April 2025. For liquid and overnight funds, a business day excludes days when money markets are closed. In practice, a liquid fund request made on a Friday before 3 pm usually gets the NAV of the day before Monday.

How exit load is calculated

Exit load is a fee for leaving before a set period. The period and rate are in the scheme’s Scheme Information Document (SID) and factsheet. SEBI’s investor FAQ calculates it as a percentage of NAV:

Exit load = load rate × units redeemed × NAV

SEBI’s example: a scheme charges 1% for redemption within 90 days. You redeem 1,000 units within that period at an NAV of ₹50. The load is 1% × 1,000 × ₹50 = ₹500, so you receive ₹49,500 before tax.

Three rules help you plan:

ItemDetails
Oldest units first.Units are redeemed on a first-in, first-out basis, so older units, often past the load period, go first.
SIP instalments count separately.The load period runs from each instalment’s allotment date, so recent SIP units may still carry a load.
No retrospective increase.SEBI says a higher or new load applies only to fresh investments, not units you already hold.

ELSS units cannot be redeemed during their lock-in period. A switch to another scheme is a redemption from the first one, so the load applies there too. Regular payouts through a systematic withdrawal plan are redemptions too; see our guide to SWP in mutual funds.

Payout timelines

SEBI requires redemption proceeds to be transferred within 3 working days of the redemption date. Schemes investing at least 80% of total assets in permissible overseas investments get 5 working days. Under the 2026 Regulations, a fund house that misses the deadline pays interest at 15% a year for the delay.

AMFI has listed exceptional situations, such as market closures and operational issues, in which a fund house may take longer. A scheme can also restrict redemptions in a liquidity crisis, for no more than 10 working days in any 90-day period. Even then, the first ₹2 lakh of each request is paid without restriction, as JM Financial’s SAI sets out.

The money goes to the bank account registered on your folio. If it does not arrive on time, raise it with the fund house or registrar first. You can then escalate to SEBI through SCORES.

Tax and TDS on redemption

You pay capital gains tax on the gain in the units sold, not on the whole payout. For tax year 2026-27, under the Income-tax Act, 2025:

Fund type Held 12 months or less Held more than 12 months
Equity-oriented (at least 65% in listed domestic equity) 20% 12.5% on gains above ₹1.25 lakh a year
Specified (debt) funds bought on or after 1 April 2023 Slab rate Slab rate

Surcharge and 4% cess apply on top. Other fund types have their own holding periods; our page on mutual fund taxation covers them. The capital gains calculator estimates the tax before you redeem.

Resident investors have no TDS on redemption proceeds and report gains in their return. For NRIs, the fund house deducts TDS from the gross proceeds, so the credit is lower than the gross value. If you are new to the lifecycle of a fund, our step-by-step guide to investing in mutual funds covers the buying side.

Frequently asked questions

How many days does mutual fund redemption take?

The fund house must transfer the money within 3 working days. Schemes with at least 80% in overseas investments have 5 working days.

What is the cut-off time for mutual fund redemption?

3 pm on a business day for most schemes. Online requests for overnight funds have a 7 pm cut-off.

How is exit load calculated?

As a percentage of NAV on the units redeemed within the load period. At 1%, redeeming 1,000 units at ₹50 costs ₹500.

What is the maximum exit load a mutual fund can charge?

3% of NAV for open-ended schemes, under the SEBI (Mutual Funds) Regulations, 2026. The actual load is set in each scheme’s SID.

Is TDS deducted when I redeem a mutual fund?

Not for resident investors. NRIs have tax deducted from the redemption proceeds.

Can I redeem part of my mutual fund units?

Yes. Enter an amount or a number of units, subject to any minimum in the scheme’s terms.

What if my redemption money is delayed?

The fund house must pay 15% a year interest for the delay beyond the deadline. Complain to the fund house or registrar, then on SEBI SCORES.

Sources

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