🔁 How to Transfer Mutual Fund Units Held in SoA (Non-Demat Form)
🛠️ Implementation Alert: Transfer of Units – Phase II is effective from 19 May 2025. (Phase I was implemented on 14 Nov 2024).
✅ Who is Eligible?
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Only individual investors (Resident Indian / NRI) are eligible to transfer units.
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Minors are not allowed to participate in unit transfers.
🧾 KYC Compliance
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All holders in both Transferor and Transferee folios must be KYC Validated (KYC Code 07).
🚫 Schemes Not Eligible for Transfer
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ETFs and Solution-Oriented Schemes like:
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Children’s Schemes
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Retirement Schemes
are excluded from transfers.
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🧍♂️ Holder Addition/Deletion Rule
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Addition or removal of holders is only allowed when the First Holder remains unchanged in both source and target folios.
🌐 Online-Only Process
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The transfer process is available exclusively online through the RTA website (like CAMS/KFintech)
📩 Dividends & Payouts
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Dividends or payouts (if due) will be credited to the Transferor, provided the request is made on the record date.
⛔ Redemption Restriction
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Transferred units cannot be redeemed for 10 calendar days from the date of transfer.
🔓 Units Must Be Free from Restrictions
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Units must be free of lien, freeze, or lock-in to be eligible for transfer.
🏦 Transfer Must Be Within Same AMC
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The Transferee must have an existing folio with the same AMC where units are being transferred.
🔐 OTP Authentication
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If units are being transferred to different holders, OTP verification is mandatory for both Transferor and Transferee (via email and mobile).
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This confirmation must be done within a specified timeline.
🧾 FIFO Method Applied
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Transfers will follow the FIFO (First-In-First-Out) method — older units are transferred first.
👤 RI/NRI Individuals Only
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Only Individual RI/NRI investors (excluding minors) are allowed to transfer units.
⚙️ Unchanged Transferor Parameters
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After transfer, the primary holder name, plan, option, and ARN (for regular plans) in the transferor’s folio will remain unchanged.
💸 Where Stamp Duty Is Applicable
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Stamp duty @ 0.015% is applicable when mutual fund units are transferred for consideration (i.e., not gifted).
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Stamp duty is not applicable in cases where units are gifted to defined relatives such as:
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Father, Mother, Son, Daughter, Spouse.
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However, stamp duty is applicable even in gift transactions to:
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Brother, Sister, and other relatives not defined under tax-exempt relationships.
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Also applicable where units are transferred to non-relatives with or without consideration.
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Stamp duty is not applicable in cases of addition/deletion of holders where the first holder remains unchanged.
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If the calculated duty is less than ₹1, it will be rounded up to ₹1.
⏳ Processing Time
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Transfers are processed within T+2 working days, where T is the date of request submission.
📊 Capital Gains & Stamp Duty Chart
| Type of Transfer | Capital Gains (Transferor) | Stamp Duty | Tax for Receiver |
|---|---|---|---|
| Transfer to relatives (with payment) | Applicable | Applicable | No tax |
| Gift to relatives (Father, Mother, Spouse, Son, Daughter) | Not Applicable | Not Applicable | No tax |
| Gift to relatives (Brother/Sister) | Not Applicable | Applicable | No tax |
| Transfer to non-relatives (with payment) | Applicable | Applicable | No tax |
| Gift to non-relatives | Not Applicable | Not Applicable | Taxable if gift exceeds ₹50,000 |
🔔 Note: Stamp duty depends on the nature of transfer (gift vs. consideration) and relationship type.
Gifts to defined relatives (under Section 56 of the Income Tax Act) are tax-free. Gifts to non-relatives become taxable if the value exceeds ₹50,000 in a financial year.
📞 Call or Write to Us for More Details
If you have any questions or need help with the Transfer of Mutual Fund Units in SoA format, feel free to reach out.
📧 Email: finguidebuddy@gmail.com
📱 Mobile: +91 98916 45052
We're here to assist you with a smooth and compliant unit transfer process.
