Systematic Withdrawal Plan (SWP)

How an SWP works

You specify the amount, frequency (monthly, quarterly, etc.) and date. On each date the AMC redeems enough units, at that day's NAV, to pay out the amount to your registered bank account.

SWPs are often used to create a regular income in retirement, or to draw down a corpus gradually towards a goal.

Points to keep in mind

• Each withdrawal is a redemption, so exit load and capital-gains tax may apply
• If the withdrawal rate is higher than the scheme's returns, the capital will reduce over time
• Withdrawals continue until you stop the SWP or the units run out

Is SWP income taxed?

Only the gain portion of each redemption is taxed as capital gains, depending on the scheme type and holding period. Tax rules change - check the current position before starting an SWP.

Can I change the SWP amount later?

Yes, by cancelling and re-registering the SWP as per the AMC's process.