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ELSS lock-in: each SIP instalment has its own 3 years

An ELSS lock-in runs three years from each purchase date, so a monthly SIP unlocks one instalment at a time. The schedule, and what it means for exits.

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An hourglass with sand running through it

The lock-in belongs to the units, not the folio

An ELSS (equity linked savings scheme) locks each unit for three years from its allotment date. It is not three years from when you opened the folio, and it is not three years from your first SIP. Every purchase has its own clock.

That matters most for a SIP. A monthly SIP in an ELSS is really 36 or 60 or 120 separate purchases, each unlocking on its own date.

A worked schedule

Say you start a ₹5,000 monthly SIP in an ELSS, with the first instalment allotted on 5 January 2027. A few of the unlock dates:

Instalment Allotted Free to redeem from
1st 5 Jan 2027 5 Jan 2030
2nd 5 Feb 2027 5 Feb 2030
12th 5 Dec 2027 5 Dec 2030
36th 5 Dec 2029 5 Dec 2032

After three years you hold 36 instalments, but only the first one is free. Each month after that, one more instalment unlocks while a new one is being locked. A SIP that never stops always has about 36 instalments locked at any moment.

What this means in practice

  • There is no partial early exit. If you need money in year two, the units are not available, whatever the fund's NAV is.
  • A lump sum is simpler. ₹1.5 lakh invested in one go in March unlocks in March three years later. A SIP spreads the tax-saving across the year but also spreads the unlock dates.
  • The deduction and the lock-in are separate. Section 80C allows up to ₹1.5 lakh a year, under the old regime only. If you are on the new regime there is no deduction, but the units still lock. Our ELSS calculator and the best ELSS fund of 2026 list cover the fund side.

After the lock-in

Once units are free they behave like any equity fund units. Gains on units held more than 12 months are long-term, which the lock-in always satisfies. The order in which a SIP's units are sold is first in, first out, explained in how SIP redemptions are taxed.

You do not have to sell at three years. Many investors leave unlocked units invested; the lock-in is a floor on how long money stays in, not a date to cash out.

This post is educational, not financial advice. Tax rules, limits and regime choices change; check the current rules or a tax professional before acting.

Frequently asked questions

When does an ELSS lock-in start?

On the date units are allotted. Every purchase, whether a lump sum or one SIP instalment, carries its own three-year lock-in from its own allotment date.

Can I redeem part of an ELSS early?

No. Units still inside their lock-in cannot be redeemed or switched out. Only units that have completed three years can be sold.

Does the lock-in apply under the new tax regime?

The lock-in is a feature of the scheme, so it applies to every unit regardless of regime. The Section 80C deduction, though, is available only under the old regime.

This is commentary on published data, not investment advice. WealthTicker is not a SEBI-registered adviser or distributor. Figures are as of the dates stated and can be revised by their source.

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