How-to expense ratio MF disclosure

How to read mutual fund expense disclosure

From WebNotes, a public knowledge base. Last updated 19 May 2026. Reading time ~3 min.

Key facts

SEBI TER caps	Slab-based by AUM and category
Components	Management fee, distribution (Regular), other operating, GST
Direct vs Regular	Difference is distribution commission (60-100 bps)
Impact	1% TER over 25 years = ~15% corpus drag

MF expense disclosure is the most underweighted variable in retail decisions. 1% TER seems small until you compound it over 25 years.

Conflict-of-interest disclosure. This guide is published by webnotes.in for informational purposes. WebNotes has no commercial relationship with any AMC or platform. No affiliate commission is earned.

Step-by-step procedure

See the procedure infobox above for the six steps.

TER caps (SEBI)

AUM slab	Equity max	Debt max
First Rs 500 crore	2.25%	2.00%
Next Rs 250 crore	2.00%	1.75%
Next Rs 1,250 crore	1.75%	1.50%
Next Rs 3,000 crore	1.60%	1.35%
Next Rs 5,000 crore	1.50%	1.25%
Next Rs 40,000 crore	5 bps reduction per Rs 5,000 crore	same
Above	1.05%	0.80%

Direct plan: Regular TER minus distribution commission.

External references

References

SEBI (Mutual Funds) Regulations, 1996, Regulation 52 (TER caps).
SEBI TER Circular updates.
AMFI Best Practice Guidelines.

Published by

webnotes.in

webnotes.in covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Revisions are tracked against the SEBI and NPCI rule changes referenced in the article.

Last reviewed: 19 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.