How-to How to PPFAS direct plan regular plan trail commission SelfInvest

How to switch from PPFAS regular plan to direct plan

From WebNotes, a public knowledge base. Last updated 17 May 2026. Reading time ~7 min. Level: Intermediate.

Key facts

Tax treatment	Switch is treated as a redemption from the regular plan and a fresh purchase in the direct plan; capital-gains tax applies to the redemption leg
Annual TER saving	Typically 0.50 to 1.10 per cent per year, depending on scheme (the regular-direct TER differential)
Exit load	PPFCF: 2% within 365 days, 1% for 365-730 days, nil beyond 730 days; computed FIFO on the switched units
Phased-switch strategy	Stagger the switch across financial years to fully use the Rs 1.25 lakh annual Section 112A LTCG exemption per year

Procedure

Confirm the existing regular-plan folio is linked to SelfInvestThe regular-plan folio must be visible in the SelfInvest dashboard. If not, follow how to link an existing PPFAS folio to SelfInvest.
Estimate the embedded LTCG and tax exposureCheck the folio’s cost basis FIFO breakdown and the unrealised gain. Compute the LTCG that would be triggered on a full switch.
Plan a phased switch if neededIf the LTCG exceeds the Rs 1.25 lakh annual Section 112A exemption, stagger the switch across financial years to keep each year’s LTCG under the exemption.
Log in to selfinvest.ppfas.com and choose SwitchTap Switch in the dashboard. Choose the source folio (regular plan) and the equivalent direct-plan scheme as destination.
Enter switch amount or unitsEnter the amount or units to switch. Review the exit-load FIFO computation.
Review tax previewSelfInvest shows the indicative LTCG and STCG breakdown for the switch.
Authorise the switchAuthorise with Aadhaar OTP, SelfInvest credentials, or biometric authentication.
Track allotment and ensure the destination direct-plan folio is activeOn T+1, the regular-plan units are redeemed and the destination direct-plan units are allotted at the destination NAV.

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.

Prerequisites

An active PPFAS SelfInvest account with the regular-plan folio linked. If not yet linked, follow how to link an existing PPFAS folio to SelfInvest .
An understanding that the switch is a taxable event. The regular-plan units sold trigger Section 112A LTCG (12.5 per cent above Rs 1.25 lakh annually) if held over 12 months, or Section 111A STCG (20 per cent) if under 12 months, for equity-oriented schemes (PPFCF, ELSS, Arbitrage, DAAF, Large Cap). Debt-oriented schemes follow the post-Finance-Act-2023 slab-rate regime.
For ELSS regular-plan units: only units past the three-year lock-in are eligible.
An estimate of the cumulative TER saving versus the one-time capital-gains tax. The TER saving compounds over the remaining holding period; the tax is paid once. For long-horizon holdings, the TER saving usually exceeds the tax over 5 to 10 years.
Awareness of exit-load applicability on the source. PPFCF units within 730 days of allotment attract exit load.
For investors with regular-plan units acquired through a distributor: the distributor is not consulted in the switch; SelfInvest’s direct-plan registration is sufficient.

The walk-through

1. Confirm the existing regular-plan folio is linked to SelfInvest

In the SelfInvest dashboard, locate the regular-plan folio. The folio’s plan flag should read Regular. If the folio is not visible:

Follow how to link an existing PPFAS folio to SelfInvest to bring it into the SelfInvest portfolio view.

2. Estimate the embedded LTCG and tax exposure

For the regular-plan folio:

View the cost basis FIFO breakdown.
Compute the embedded unrealised gain (current NAV multiplied by units, minus the FIFO cost basis).
For equity-oriented schemes (PPFCF, ELSS, etc.), the gain is LTCG if held over 12 months, STCG if under 12 months. The Rs 1.25 lakh per FY exemption applies to LTCG only.
For debt-oriented schemes (Liquid Fund, Conservative Hybrid), the gain is taxed at the slab rate post Finance Act 2023.

For example: a Rs 5 lakh regular-plan PPFCF folio with Rs 2 lakh of embedded LTCG would trigger a Section 112A tax on (Rs 2,00,000 minus Rs 1,25,000) = Rs 75,000 at 12.5 per cent, or Rs 9,375. The tax is meaningful but typically much smaller than the multi-year compounded TER saving.

3. Plan a phased switch if needed

For folios with embedded LTCG well above Rs 1.25 lakh per FY (e.g., Rs 5 lakh embedded LTCG), staggering the switch across multiple financial years allows the investor to use the Rs 1.25 lakh exemption each year and minimise the total tax.

A common phased-switch plan:

FY 1: Switch enough regular-plan units to realise Rs 1.25 lakh LTCG (zero tax under Section 112A).
FY 2: Switch another Rs 1.25 lakh LTCG worth.
FY 3 onwards: Continue until the regular-plan folio is fully switched.

This requires patience but eliminates the tax cost almost entirely (assuming the investor has no other LTCG events in those FYs that also use the exemption).

Alternative: switch in one shot and pay the tax, if the investor wants to immediately start saving on TER and the multi-year delay is undesirable.

4. Log in to selfinvest.ppfas.com and choose Switch

Log in to selfinvest.ppfas.com or the SelfInvest mobile app. From the dashboard, tap Switch. Choose the regular-plan folio as the source. Choose the equivalent direct-plan scheme as the destination:

PPFCF Regular Growth -> PPFCF Direct Growth.
ELSS Regular Growth -> ELSS Direct Growth.
Liquid Fund Regular Growth -> Liquid Fund Direct Growth.
(Similarly for each PPFAS scheme.)

5. Enter switch amount or units

Enter the switch amount or units. For phased switching, enter only the amount or units corresponding to the targeted FY LTCG cap.

SelfInvest displays:

The indicative source NAV and units to be redeemed.
The exit load applicable (FIFO on source units).
The indicative destination unit allotment at the destination NAV.

6. Review tax preview

SelfInvest shows the capital-gains preview:

LTCG breakdown by holding period.
STCG breakdown.
Estimated tax under the applicable section (subject to investor’s other LTCG events for the FY).

Verify the preview against the planned tax exposure. If the LTCG significantly exceeds the targeted amount, reduce the switch quantity.

7. Authorise the switch

Authorise with:

Aadhaar OTP.
SelfInvest password and OTP.
Biometric authentication on the mobile app.

8. Track allotment and ensure the destination direct-plan folio is active

On T+1, both legs complete:

The regular-plan units are redeemed at the source NAV.
The destination direct-plan units are allotted at the destination NAV.

If a direct-plan folio for the destination scheme does not yet exist, a new folio is created. The investor now has two folios for the same scheme under the same PAN: one regular-plan (with reduced or zero units) and one direct-plan (with the newly allotted units).

For subsequent investments in the same scheme, place them directly into the direct-plan folio to avoid re-creating regular-plan exposure.

What trips people up

Tax surprise on full-switch: A long-held PPFCF regular folio with Rs 8 lakh embedded LTCG triggers (Rs 8 lakh minus Rs 1.25 lakh) times 12.5 per cent equals Rs 84,375 in tax on a full switch. Plan a phased approach if this tax burden is unacceptable.
Exit-load drag: PPFCF regular units within 365 days of allotment incur 2 per cent exit load. Wait for the exit-load period to elapse before switching, or budget for the load.
ELSS lock-in restriction: Each ELSS installment is locked for 3 years from its individual allotment date. Switching ELSS regular to ELSS direct can only target units past their individual lock-ins. SelfInvest blocks the switch on locked installments.
Distributor trail-commission entitlement: The trail commission accrues until the regular-plan units are redeemed (i.e., until the switch occurs). The distributor is not entitled to any commission on the post-switch direct-plan units. Some distributors push back on this; the investor’s switch authorisation overrides any distributor objection.
Folio fragmentation: Switching mid-position creates two folios for the same scheme. Operationally this is acceptable; the investor can choose to use only the direct-plan folio going forward and let the regular-plan folio diminish through subsequent phased switches.
Other LTCG events in the same FY: Other equity-mutual-fund LTCG events (from other AMCs or from stock-investing) also consume the Rs 1.25 lakh exemption. Coordinate the phased-switch plan with other anticipated LTCG events for the FY.
NACH mandate associated with the regular-plan folio: If a SIP runs against the regular-plan folio, switching does not stop the SIP. The SIP continues to add to the regular-plan folio. To avoid re-creating regular-plan exposure, cancel the regular-plan SIP and register a fresh SIP in the direct-plan folio.
Common-sense check on lifetime TER saving: The TER differential on PPFCF is approximately 0.85 per cent annually (regular plan around 1.92 per cent, direct plan around 1.07 per cent as of May 2026). On a Rs 5 lakh holding over 15 years, the TER saving compounds to approximately Rs 1.5 to 2 lakh, comfortably exceeding any phased-switch tax cost.
Post-switch direct-plan folio’s exit-load clock starts fresh: The new direct-plan units have their own exit-load clock starting from the destination allotment date. If the investor switches in May 2026 and redeems in June 2026, the direct-plan units are subject to PPFCF’s 2 per cent exit load.
Hidden cost: STT (Securities Transaction Tax): Switches in equity-oriented schemes incur STT on the redemption leg (0.001 per cent on the redemption value). The amount is small but is deducted from the proceeds.

Phased-switch example

A PPFCF investor holds Rs 10 lakh in a regular-plan folio with Rs 3 lakh of embedded LTCG, accumulated over 7 years (well past exit-load period). Goal: minimise tax while completing the regular-to-direct switch.

FY	Switch amount (approx)	LTCG realised	Tax (LTCG above Rs 1.25 lakh at 12.5%)
FY 2026-27	~Rs 4 lakh	~Rs 1.25 lakh	Rs 0
FY 2027-28	~Rs 4 lakh	~Rs 1.25 lakh	Rs 0
FY 2028-29	~Rs 2 lakh	~Rs 0.50 lakh	Rs 0
Total	Rs 10 lakh	Rs 3 lakh	Rs 0

Compared to a single-shot switch: Rs (3 lakh - 1.25 lakh) x 12.5 per cent = Rs 21,875 in tax. The phased approach saves Rs 21,875 at the cost of two extra years of waiting.

How to switch between PPFAS schemes covers the broader inter-scheme switch mechanics
How to redeem PPFAS units via SelfInvest covers the standalone redemption flow
How to link an existing PPFAS folio to SelfInvest is the prerequisite for distributor-acquired folios
How to cancel a PPFAS SIP covers stopping the regular-plan SIP after the switch
The reference article on the PPFAS SelfInvest portal covers the full portal functionality
The reference article on PPFAS direct vs regular plan covers the TER and trail-commission economics

External references

References

PPFAS Mutual Fund, SelfInvest portal at selfinvest.ppfas.com, switch flow (accessed May 2026).
PPFAS Scheme Information Documents for the seven active schemes.
SEBI Master Circular for Mutual Funds, 22 May 2024.
SEBI (Mutual Funds) Regulations, 1996.
Finance Act, 2024 (Section 112A LTCG at 12.5%, Section 111A STCG at 20%, Rs 1.25 lakh LTCG exemption).
Finance Act, 2023 (debt-MF taxation amendment).
SEBI Circular on direct-plan introduction, dated 13 September 2012.
AMFI industry data on direct-plan adoption.
PPFAS investor desk FAQ at amc.ppfas.com/faqs/.
CAMS Investor Services operational documentation.

Reviewed and published by

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