How-to STP stop STP cancellation

How to stop an STP (Systematic Transfer Plan)

From WebNotes, a public knowledge base. Last updated 19 May 2026. Reading time ~4 min.

Key facts

Cancel route	Platform / AMC portal: STP > Cancel
Effective	Next scheduled transfer date or immediately (platform-dependent)
Residual source corpus	Stays in source fund; redeem separately or restart STP
Tax	Already-completed transfers stay taxable; future transfers cancelled

Stopping an STP is straightforward operationally, but the strategic decision matters: an STP cancelled mid-stream leaves residual cash in the source fund and an under-funded target. Plan the post-stop disposition before cancelling.

Conflict-of-interest disclosure. This guide is published by WebNotes Editorial Team 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.

When stopping STP is appropriate

Reason	Post-stop action
Goal achieved (fully deployed to target)	No action; source corpus is zero
Market conditions changed	Lump-sum balance into target (single switch)
Target scheme no longer suitable	Stop STP; restart with new target
Cash flow change	Stop STP; keep source as emergency corpus
Tax management (year-end)	Stop to defer further taxable transfers
Equity correction (opportunity)	Lump-sum the rest to capture lower NAVs

Common post-stop options

Option 1: Leave source corpus in liquid fund.

Pros: continues earning liquid yield.
Cons: no exposure to equity for the un-deployed portion.
Use when: future deployment uncertain.

Option 2: Single switch of residual to target.

Pros: full equity exposure achieved.
Cons: bears the full timing risk of the residual amount.
Use when: confident in current valuations.

Option 3: Restart STP with modified parameters.

Pros: continues phased deployment with adjustments.
Cons: requires fresh STP setup.
Use when: original parameters wrong; new circumstances.

Option 4: Redeem to bank.

Pros: cash available.
Cons: tax event; out of investment cycle.
Use when: cash genuinely needed.

Reverse STP consideration

Some investors use reverse STP (equity → debt) as a profit-booking mechanism near a goal. If you’re stopping a forward STP because you’re approaching goal, consider whether a reverse STP from the target back to source/debt is the next phase.

Tax finalisation

Completed STP transfers up to the stop date:

Each is a deemed redemption from source + subscription to target.
Capital gains realised; reported in ITR.

Cancelling the STP doesn’t undo prior transfers. The realised gains stand.

External references

References

SEBI (Mutual Funds) Regulations, 1996.
AMFI Best Practice Guidelines on STP.
Income Tax Act, 1961, Sections 112A, 111A, 50AA.

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WebNotes Editorial Team

The WebNotes Editorial Team 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. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

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