How selling a mutual fund works: NAV, days and charges

Four steps between "sell" and your bank

Selling a mutual fund is not like selling a share. There is no buyer on the other side and no live price. Here is what happens.

1. You place a redemption request, by units, by rupee amount, or for all units, through the fund house's app, a platform or your distributor.
2. The request is priced at a NAV determined by the cut-off time.
3. Any exit load is deducted from the proceeds.
4. The money is sent to the bank account registered in your folio.

Which NAV applies

You do not get the NAV on your screen. You get the NAV of the business day your request is accepted, and that depends on timing.

• Request received before the cut-off (generally 3 pm for most equity and debt funds) on a business day: that day's NAV, declared in the evening.
• Request received after the cut-off, or on a weekend or market holiday: the next business day's NAV.

So a request at 2:45 pm on a Friday gets Friday's NAV; at 3:15 pm it gets Monday's. You can't know the number in advance. For a volatile fund that gap can be a percent or two in either direction. What NAV is and when you get it walks through the cut-off rules.

How many days to get the money

Regulations require fund houses to pay within a fixed number of working days from the redemption date; in practice:

The clock starts at the pricing date, not at the day you click. A request on Friday evening, priced Monday, will not reach your bank before Tuesday or Wednesday. If you need money by a given date, such as a tuition payment or EMI, start earlier than you think. Our guide on where to keep an emergency fund is built around exactly this problem, and where to park short-term money covers the faster options.

What comes off before you get paid

Exit load. Many funds charge a percentage if you sell within a set period, commonly a year for equity funds. If a fund has a 1% exit load for the first 12 months and you redeem ₹1,00,000 at month 8, ₹1,000 is deducted. Units are sold on a first-in-first-out basis, so the oldest units go first; an old SIP's early instalments may already be past the load period. See equity fund exit loads in 2026 for how common each structure is.

Tax. You pay tax on the gain, not the full proceeds. On equity-oriented funds, gains within 12 months are taxed at 20% and long-term gains above ₹1.25 lakh a year at 12.5%; on debt funds, gains are taxed at your slab. Residents have no TDS deducted on mutual fund gains, so the liability appears when you file. The details are in how debt and hybrid funds are taxed and the mutual fund taxation guide.

Ways to take money out

For regular income, a systematic withdrawal plan avoids selling everything at one price; see SWP for retirement income and the SWP calculator. A switch is a sale for tax purposes, as covered in switching mutual funds is a taxable event.

A pre-sale checklist

1. Check the exit load and the date your units cross out of it. A few days' wait can save ₹1,000 on ₹1 lakh.
2. Estimate the tax with the capital gains calculator so there are no surprises.
3. Redeem before the cut-off, and not on a Friday if you need the money early next week.
4. Check the bank account in the folio is current, and in your name.
5. Don't sell in a panic. If you are redeeming because the market fell, read this first.

This is general information, not advice on any fund or sale. Timelines, loads and tax rules differ by scheme and change over time, so check the scheme documents and the current rules.