How to switch from PPFAS regular plan to direct plan

Sun, 17 May 2026 00:00:00 +0000

Regular-plan units carry an annual trail commission embedded in the TER , typically 0.50 to 1.10 per cent more than the direct-plan TER on PPFAS schemes. That delta compounds over time, and over a multi-year holding it adds up to a meaningful drag. Switching to direct stops the bleed.

The complication is that the switch is a taxable event under SEBI’s intra-AMC switch treatment, the same as any other switch or redemption. For equity-oriented schemes, Section 112A LTCG (12.5 per cent above the Rs 1.25 lakh annual exemption) applies if units are held over 12 months; Section 111A STCG (20 per cent) under 12 months. For investors sitting on substantial unrealised gains, the one-time tax can be a real friction, sometimes enough to make the switch’s payback period multi-year. A phased multi-FY approach (splitting the switch across two or three financial years to use the Rs 1.25 lakh LTCG exemption each year) usually makes more sense than doing it all at once.

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How to switch from PPFAS regular plan to direct plan