Invested in Mutual Funds Before 2013? Here’s Something You May Want to Check

If you started investing in mutual funds before 2013, there is an important change you should know about.

Before 2013, there was only one type of mutual fund plan for all investors. Whether investments were made through a distributor, advisor, bank, or directly with the mutual fund company, everyone stayed in the same plan.

From January 1, 2013, SEBI introduced a separate option called the Direct Plan. Because of this change, investors who were already invested before 2013 were given a choice — they could either continue with their existing investment arrangement or make changes if they wanted to.

Many investors continued with their investments without taking any action. Over time, some investors may have noticed that they are still invested in a Regular Plan even though there is no distributor code linked to their folio today.

If you are one of these investors, you now have two simple options available:

1. Re-map your investment to a distributor

If you would like help with your investments, you may choose a distributor or advisor and link them to your folio.

The distributor can help with services such as:

• Investment support
• Transaction assistance
• Portfolio reviews
• Guidance and queries

Since the investment continues in the same plan, this option generally does not have tax implications.

2. Switch to a Direct Plan

If you prefer managing your investments on your own, you may choose to switch to a Direct Plan.

However, investors should remember that this switch is treated as:

Redemption from the existing plan, and

Fresh purchase into the new plan

Because of this, there may be capital gains tax implications. Investors may consider consulting a tax advisor before taking this step.

The switch request can usually be submitted:

Online through MF Central or respective Asset Management Company/RTA office.

Investors may also choose not to make any changes and continue with their current investment arrangement.

There is no “one-size-fits-all” option. The right choice depends on whether you want investment support, prefer self-management, and are comfortable with possible tax implications, if any. Understanding your options can help you make an informed decision.

Tax implications may vary for each investor. Investors are advised to consult their tax advisor, if required before taking any decision.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.