https://v2.webnotes.in/tags/lot-identification/Recent content in Lot Identification on WebNotesHugoen-INTue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/sip-taxation-fifo/Tue, 12 May 2026 00:00:00 +0000https://v2.webnotes.in/sip-taxation-fifo/<p><strong>Taxation of Systematic Investment Plans (SIPs)</strong> in India follows the same capital gains framework as lump-sum mutual fund investments, but with a critical difference in lot tracking: each SIP instalment creates a separate lot of units with its own acquisition date and purchase NAV. When units are redeemed, the tax computation must identify which lot is being redeemed and what the holding period of that lot is. The income-tax rules and mutual fund industry practice both apply the <strong>FIFO (First In, First Out)</strong> method, meaning the earliest-purchased units are treated as sold first. This creates a situation where a SIP investor who redeems a portion of their holdings may have a mix of long-term and short-term units in the same redemption transaction.</p>