A switch means to redeem one fund and purchase another fund within the same AMC.
For example, if you invested in a small-cap fund and as per market conditions you think the market will be bearish, you can switch to a debt fund. If you switch Mutual funds, it is considered a capital gain/ loss event if you click the switch button or redeem and reinvest. Since you exit, the profits will be taxable as capital gains.
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