Lock-in period for transmitted MF units on demise of sole holder to the sole nominee.

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Dear sir,

My aunty bought Sundaram MF Diversified ELSS units in Feb 2021. I was the only nominee for the same. She passed away in Jan 2023. The units were transmitted post sole original holder's death to my Demat account as I was the sole nominee, in Sept 2023. Now I want to sell these MF ELSS units as the lock in period is already over from original holder's buying date. But in death case the nominee can encash it any time after 1 year of original holder's purchase date. But my DP Bank of Baroda BOBCAPS says, that units are under lock-in period, as they are considering transmission date as date of purchase, which is wrong. Kindly confirm what I said is correct, that lock-in is only for 1 year. I submitted all the proof of my aunt's SOA of DP stating date of purchase, date of transmission, my DP SOA showing date of transmission, SEBI, CBDT, I/T MF association circulars, Sundaram SID on ELSS, highlighting the same to BOBCAP cust care. But they refuse to answer. What should I do? Since MFs are in Demat form, only holding DP can redeem the units.

Sunil S. Joshi.

Replies (2)
Quick Summary
This discussion addresses the confusion surrounding the lock-in period for ELSS mutual fund units when the sole holder passes away. The nominee, Sunil S. Joshi, faced issues with his DP (Bank of Baroda BOBCAPS) who incorrectly stated the units were still locked in, considering the transmission date as the purchase date. Sunil correctly argued that the lock-in period should be calculated from the original purchase date, allowing him to sell the units one year after his aunt's purchase. Despite initial resistance, Sunil eventually received the proceeds, highlighting that many DPs and MF houses may be unaware of or misinterpret these rules. He advises escalating issues if faced with similar problems.

Lock - in period is one year is over. Escalate any issue can directly contact to the higher authorities 

Respected sir,

Many DPs, Banks or even MF Houses are not aware of this or ignorant staff handle redemption request, point blank refusing redemption stating lock in period. I shared with them the MF SID, CBDT, I/TAX, SEBI, NSDL relevant Notifications and even raised a ticket with NSDL, as well as escalated it with BOISL. I asked this in forum, so that experts like you will ratify, what I did was right or needed any further action. To my surprise, I don't know what worked, but I received the proceeds in my Account this morning.

I am very grateful, that stalwarts like you are forthcoming help us clear any doubt. 

Best regards,

Sunil S. Joshi. 

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