Did you mean to stop the SIP, or sell the units?
Stopping a SIP tells the bank not to debit the next instalment. The units you already bought stay in the folio. Redeeming sells units. That sale can have an exit load, and it can have tax, counted from the date each instalment was bought. People mix the two buttons and then cannot work out why money arrived in the bank, or why a SIP they “cancelled” still shows a balance.
Two different instructions
On the fund platform, pause or cancel the SIP if you want future debits to stop. Check the bank mandate as well, because a cancelled SIP on one screen can leave a debit instruction live on another. After you stop, the folio balance should still be there. That balance can keep rising and falling with the market. You have not “exited.” Redeem only when you want cash and you have accepted the load and the tax on the units you pick. If the scheme’s exit load applies for a year from each purchase, last month’s SIP instalment is still inside that year even if you started the SIP long ago. Selling “the profit” often sells the newest units first or the oldest units first depending on the method you choose. Look at the method on the order. First-in-first-out is the usual default, and it still needs you to see which lots are inside the load window.
Tax follows the instalment, not the SIP
Each purchase has its own holding period. Equity held for a short period is taxed as short-term. Equity held longer is taxed as long-term, and the rates and the annual exemption are whatever the income-tax rule says for the year you sell. This page does not freeze those rates. They have changed before, and the income-tax site for the year of sale is the source. Debt funds have their own rule, which is also on that site, and it is not the equity rule. Stopping the SIP does not create this tax. The redemption does. A switch from a regular plan to a direct plan is a redemption. So is a move from one scheme to another, even when the app calls it a switch.
Who should only stop the debit
Stop the debit, and leave the units, if the fee on a regular plan is the issue and the old lots are still inside an exit load. Start new money in the direct plan. Stop the debit if your horizon has shortened and you will need the cash, but you can wait out a load period of a few months without missing the payment the cash is for. Redeem if you need the cash now, or if you have decided the fund no longer does the job and you have priced the tax. Do not redeem a long-held index fund to buy another index fund because a yearly ranking changed. That sale is often the same portfolio with a tax bill.
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Questions people ask next
I stopped the SIP. Why is the value still moving?
Because you still own the units. The NAV moves every business day. If you wanted the value in the bank, you have not placed a redemption.
Can I redeem only the units that are out of the exit-load period?
Often yes, if the order screen lets you choose the amount or the lots and you can see the purchase dates. If you cannot see the lots, ask the registrar statement before you sell a round number.
Does a pause for three months count as redeeming?
No. A pause stops debits for the months you selected. Resume or cancel is still about future instalments. The units stay unless a separate redemption order exists.