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Summary: Switching from a regular plan to a direct plan can trigger an immediate tax bill, but staying put does not make that liability disappear. The real comparison is between the tax cost of switching now and the higher expenses you continue paying by remaining in a regular plan.
Summary: Switching from a regular plan to a direct plan can trigger an immediate tax bill, but staying put does not make that liability disappear. The real comparison is between the tax cost of switching now and the higher expenses you continue paying by remaining in a regular plan. A Rs 15,000 monthly SIP, run without a break for 15 years, is worth about Rs 72 lakh today. Around 62 per cent of that is gain. Move it from a regular plan to a direct plan and the capital gains bill comes to about Rs 5.45 lakh, payable now, out of your own pocket. That is 7.6 per cent of the portfolio, in a single stroke. This is the decision investors put off the longest. They know direct plans cost less. They still do not move. The tax is a bill you can see and feel. The saving is only a lower expense, shaved quietly off the fund’s value each day, which you never
This article was originally published on August 24, 2026.
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