Your mutual fund costs changed on 1 April 2026
The first complete rewrite of India mutual fund rules since 1996. Most coverage led with the fee cut. The more useful change is what you can now see.
Published 20 July 2026 · 6 min read · Sources listed at the end
What happened
SEBI notified the SEBI (Mutual Funds) Regulations, 2026 in January, replacing regulations that had stood since 1996. They took effect on 1 April 2026.
Two things matter to an ordinary investor: how costs are presented, and how much they can be.
Costs are now shown in parts
Previously the total expense ratio was one number bundling several very different things together: the fund manager fee, operating costs, and statutory levies that are not really fees at all.
From April, that splits into three:
- Base expense ratio. Only what the fund house charges to manage the money.
- Brokerage and transaction costs. Disclosed separately.
- Statutory levies. GST, STT, stamp duty, exchange and clearing charges, charged on actuals and now sitting outside the cap.
Your total cost is not automatically lower because of this. What changes is that you can now see how much of it is the manager and how much is trading.
The caps came down
Most slabs fell by roughly 10 to 15 basis points. A basis point is one hundredth of a percentage point, so this is a modest but real trimming of the ceiling.
| Category | Was | Now |
|---|---|---|
| Index funds and ETFs | 1.00% | 0.90% |
| Open ended equity, AUM under Rs 500 crore | 2.25% | 2.10% |
| Open ended equity, AUM above Rs 50,000 crore | 1.05% | 0.95% |
| Debt schemes, smallest slab | about 2.00% | about 1.85% |
Brokerage limits were also cut sharply, and the extra allowance funds could charge for carrying an exit load was removed entirely.
Remember these are ceilings, not prices. Competitive index funds in direct plans charge a small fraction of the 0.90% cap.
The incentive worth being sceptical about
Switching funds is not free. It is treated as a sale for tax purposes, so it can trigger capital gains, and it may attract an exit load.
If a switch recommendation arrives in the next year, ask for the reason in terms you can check: what is wrong with the current fund, and what specifically is better about the proposed one beyond it being newer.
What to do about it
- Nothing urgent. Your units, folios and investments are unchanged. This is a change in what you are shown and what can be charged.
- Look at your fund factsheet once. The new breakdown tells you something the old single number did not.
- Check whether you hold a direct or regular plan while you are there. That gap is usually larger than anything in these reforms. See direct vs regular plans.
- Be sceptical of switch advice for the next year in particular.
Full detail in mutual funds.