How to set up an SIP on a smallcase
A Systematic Investment Plan (SIP) on a smallcase allows investors to deploy a fixed amount into a thematic equity basket at regular intervals. Unlike a mutual fund SIP, where units of a pooled fund are allocated automatically, a smallcase SIP places individual equity buy orders for the constituent stocks of the basket on each instalment date, crediting shares to your demat account directly. This guide explains the setup procedure, execution mechanics, payment mandate options, and the capital gains and brokerage implications unique to smallcase SIPs.
Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team for informational purposes. WebNotes has no commercial relationship with Zerodha, Smallcase Technologies, or any smallcase creator. No affiliate commission is earned from SIP enrolments or investments.
Market-risk disclosure. Smallcase SIP investments carry equity market risk. Rupee-cost averaging through SIP reduces the impact of entry-price volatility but does not eliminate downside risk. The value of constituent stocks can fall below the total amount invested across all instalments. Past performance of a smallcase is not indicative of future returns. Capital gains tax applies to each instalment’s holdings at the point of sale; frequent SIPs create multiple lots with different holding-period clocks. Consult a SEBI-registered investment adviser before committing to a SIP plan.
Prerequisites
Before following this guide, confirm that:
- You have an active Zerodha trading-and-demat account linked to the smallcase platform. If you have not yet linked your account, see How to subscribe to a smallcase on Zerodha.
- You have either already invested in the smallcase on which you want to set up a SIP, or you intend to start a fresh SIP as your first investment in that basket.
- A UPI handle or net-banking mandate is available for the bank account linked to your Zerodha account.
- You have reviewed the tax implications of building multiple lots of equity holdings across SIP instalments (see the capital gains section below).
Step-by-step procedure
Step 1: Navigate to the smallcase and open the SIP setup
Log in to the smallcase platform via Kite or directly at smallcase.com. Navigate to the smallcase detail page for the basket on which you want to set up a SIP.
If you have already invested in the smallcase, the SIP option is available in the My Investments or Portfolio section, under the smallcase’s individual holding card. Click Set up SIP or the SIP icon.
If this is your first investment in the smallcase, the SIP setup option is also available on the smallcase’s public Discover page. Setting up a SIP before making an initial lump-sum investment is allowed; the first SIP instalment functions as your first investment.
Step 2: Select SIP frequency and date
The SIP frequency options are:
| Frequency | Options |
|---|---|
| Weekly | Choose a day of the week (Monday through Friday; market days only) |
| Monthly | Choose a date of the month (1st through 28th recommended; avoid month-end dates prone to holidays) |
| Quarterly | Choose a month and date for each quarter’s instalment |
Date selection guidance. Avoid dates that coincide with frequent stock exchange holidays. NSE and BSE are closed on national holidays (Republic Day, Holi, Independence Day, Gandhi Jayanti, Diwali Laxmi Puja, Christmas). If your chosen SIP date falls on a holiday, the platform typically executes the SIP on the next available trading day. Monthly SIPs on dates between the 5th and 25th of the month are generally less holiday-prone than first or last-week dates.
Step 3: Enter the SIP amount
Enter the recurring instalment amount. This amount must equal or exceed the smallcase’s minimum investment as displayed on the setup screen. The minimum investment varies by basket and is recalculated from current market prices; the minimum at setup time is used as the floor, but actual order execution recalculates quantities from prices on the instalment date.
The SIP amount is fixed at setup and does not auto-adjust with price changes. If constituent stock prices rise significantly over time, the fixed SIP amount may not be sufficient to purchase one share of the most expensive constituent on some dates. The platform handles this by buying zero shares of that constituent on the affected instalment and allocating the excess amount proportionally across others, or by prompting you to increase the SIP amount.
Step 4: Set up the payment mandate
To enable recurring debits, the smallcase platform requires a payment mandate. Two mandate types are supported:
UPI AutoPay mandate. The platform presents a UPI mandate request. Approve the mandate on your UPI application (Google Pay, PhonePe, Paytm, BHIM, or bank app). The mandate authorises a maximum debit limit per instalment (set to the SIP amount or a round figure above it). Each actual debit on an instalment date triggers a confirmation notification in your UPI app.
Net-banking mandate. For investors whose bank’s UPI limit is insufficient for the SIP amount (per-transaction UPI limit is Rs 1,00,000 for most handles), a net-banking mandate provides an alternative. Complete the net-banking mandate registration as prompted.
Ensure that the bank account registered for the mandate is the same bank account linked as your primary bank with Zerodha.
Step 5: Review and confirm the SIP
The SIP confirmation screen summarises:
- Smallcase name
- SIP amount per instalment
- Frequency and date(s)
- Payment method (UPI mandate or net banking)
- Start date of the first instalment
Review all details carefully, particularly the start date and frequency. Confirm to activate the SIP. After confirmation, the SIP appears in your smallcase portfolio under My SIPs. You can view upcoming SIP dates, pause the SIP, change the amount, or cancel the SIP from this section.
Step 6: Approve each instalment when notified
On each SIP execution date, the smallcase platform sends an email notification, a push notification to the smallcase mobile app (if installed), and an in-app alert. The notification contains a link to approve or skip the instalment.
Clicking Approve triggers the basket order: individual market orders are placed for each constituent stock through Kite Connect, and your bank account is debited for the SIP amount.
If you do not act within the approval window (typically a few hours; all approvals must be completed before market close at 3:30 PM IST), the instalment is automatically skipped. No penalty applies; the SIP remains active for the next scheduled date.
Modifying or cancelling a SIP
To modify the SIP amount or frequency: navigate to My SIPs in the smallcase portfolio and select Edit SIP. Changes take effect from the next instalment date.
To cancel a SIP: select Cancel SIP from the same view. Cancelling the SIP does not exit the smallcase position; existing constituent holdings remain in your demat account. To exit the position, see How to exit a smallcase position.
Capital gains and tax implications
Each SIP instalment creates a new batch of constituent stock purchases with a new acquisition date. This has the following tax implications:
| Scenario | Tax treatment |
|---|---|
| Holding sold within 12 months of the SIP instalment date | Short-term capital gains (STCG) at 20% (post Finance Act 2024) |
| Holding sold after 12 months from the instalment date | Long-term capital gains (LTCG) at 12.5% above Rs 1,25,000 annual LTCG exemption (post Finance Act 2024) |
| Equity delivery brokerage | Nil at Zerodha |
| STT on buy | 0.1% of turnover per instalment |
Multiple SIP instalments create multiple lots. When you eventually sell, the oldest lots are matched first under the FIFO (first-in, first-out) method for tax purposes in India. For detailed tax reporting, download the capital gains statement from Zerodha Console under Reports > Tax P&L.
What can go wrong
Mandate debit fails on instalment date. If the bank account has insufficient funds or the UPI mandate limit is exceeded, the SIP instalment cannot be executed. Ensure sufficient bank balance before each scheduled SIP date.
Notification not received. Check your spam folder for email notifications. For push notifications, ensure the smallcase app has notification permissions on your device. You can also manually check the smallcase platform for pending SIP approvals on the scheduled date.
SIP amount insufficient for all constituents. If a constituent stock price has risen significantly since setup, the SIP amount may be insufficient to buy shares of all constituents. The platform flags this and shows which constituent(s) could not be purchased. Increase the SIP amount via Edit SIP if this occurs repeatedly.
Approval window missed. If the approval window closes before you act, the instalment is skipped. The SIP remains active; the next instalment proceeds normally on the next scheduled date.
Related guides
- How to subscribe to a smallcase on Zerodha
- How to invest in a smallcase via Kite
- How to exit a smallcase position
- Smallcases on Zerodha
- Zerodha Coin, mutual fund SIPs
References
- Smallcase Technologies. “SIP on smallcase, how it works”. support.smallcase.com. Accessed May 2026.
- Zerodha Support. “Smallcase SIP setup”. support.zerodha.com. Accessed May 2026.
- NPCI. “UPI AutoPay framework”. npci.org.in. Accessed May 2026.
- Ministry of Finance. Finance Act 2024, capital gains tax amendments. July 2024.
- Income Tax Act, 1961. Section 111A (STCG) and Section 112A (LTCG).
- NSE India. “Exchange holiday calendar 2025-26”. nseindia.com. Accessed May 2026.