I have invested in a small-cap fund (Direct plan-growth) through SIP for quite some time, but it’s highly volatile. Now, I want to invest in a more stable fund, such as a multi-cap or a flexi-cap fund. I want to switch to another fund and also minimise my tax liabilities. Is it possible to switch from one fund to another?

-Narinder Gautam

First of all, thank you for showing interest in The Hindu Moneywise. The word ‘stable’ in markets can be tricky.

Even flexi-cap and multi-cap funds are not always stable and can witness volatility and declines at times.

If stability is your priority, stocks and mutual funds may not be suitable, as they are inherently volatile and are better suited for long-term investing, say five to seven years at least. For short-term, you can park your funds in instruments such as FDs, RDs, or certain debt funds.

With regard to switching funds, even within the same fund house, it is treated as a redemption (selling of units). If you exit with a profit, capital gains tax will apply, depending on the holding period of your units.

If you exit at a loss, it erodes your capital, though such losses can be set off against gains for tax purposes. In both cases, you also need the discipline to reinvest the lump sum into another fund, without spending it upfront.

A simpler approach could be to pause or cancel your future SIP instalments, while retaining the accumulated units/amount without redeeming.

Further, you can redirect the future SIP contributions into a new fund of your choice.

This approach offers several advantages. It works by separating your past SIP accumulations from your future investment decisions.

Since you are not redeeming your existing units, there is no sale taking place, and therefore no immediate capital gains tax arises.

Likewise, if the fund is currently at a loss, you also avoid booking a loss by staying invested.

In effect, your existing corpus stays invested and it gets an opportunity to regain value over time. Additionally, since there is no redemption, you also bypass the exit load (if applicable) that is typically charged when units are redeemed within a short holding period, especially under one year. Above all, as per your wish, you also get an opportunity to redirect your future monthly contributions into a fund of your choice.

Another behavioural advantage: since you are not redeeming and receiving a lump sum in your bank account, you reduce the risk of spending the money impulsively. This approach creates a balanced strategy where you minimise taxes and costs, avoid premature loss realisation, and gradually improve the quality of your portfolio through future investments.

Sir, I am a senior citizen with total taxable income below the taxable threshold. Currently, banks and other financial institutions deduct TDS on the interest from my deposits. So, can I submit Form 15H to banks and institutions from April 2026 to avoid TDS and claim a refund later?

-M Vijayaraghavan

Sir, from April 1, 2026, both the Forms 15G & 15H were replaced by a new unified Form No. 121. From this financial year onwards, all eligible taxpayers, both below and above 60 years of age, will only have to submit Form No. 121, and the earlier Forms are no longer valid.

Form 121 applies to income such as PF withdrawals, pension, rental income, interest on deposits, insurance commission, income from mutual funds, dividends, and proceeds from life insurance policies.

HUFs are eligible to use this form, whereas companies, firms, and non-residents are not. Please note that Form 121 must be submitted separately to each bank or financial institution from which you earn interest income.

(The writer is an NISM & CRISIL-certified Wealth Manager and certified in NISM’s Research Analyst module)

Published on April 27, 2026