Portfolio Management Scheme SEBI – Taxation Consultancy Guide for the General Public

When you hear terms like Portfolio Management Scheme SEBI or wonder how sebi registered cases differ from sebi NON registered cases, it may feel like navigating a maze. Many investors jump into PMS with excitement—yet taxation, compliance, and the SEBI rulebook often get ignored until it's too late. Think of it like planting a garden: you don’t just sow the seeds; you have to understand the soil, weather and tools. Similarly, investing isn’t only about returns—it's about understanding the ecosystem that protects your hard-earned money.

This guide simplifies everything. We break down Portfolio Management Schemes (PMS), SEBI’s regulations, taxation system, compliance rules, risks, and how to avoid trouble—especially when dealing with unregistered advisors.

Learn taxation rules for portfolio management scheme SEBI, sebi registered cases, sebi NON registered cases & compliance essentials for investors.

Introduction to Portfolio Management Scheme SEBI

Portfolio Management Scheme (PMS) is a SEBI-regulated service where expert portfolio managers invest on your behalf. It’s popular among high-net-worth individuals looking for personalized strategies.

However, what most investors struggle with is understanding:

  • Is PMS safe under SEBI?

  • How do sebi registered cases differ from sebi NON registered cases?

  • How does taxation work on PMS?

This article answers these in a simple, human-centered way.

 

What Exactly Is a PMS and How It Works

A PMS is a customized investment solution. Unlike mutual funds—where you are one among millions—PMS gives you a separate stock account managed specifically for you.

How it works:

  • You open a demat account exclusively for PMS.

  • The PMS manager buys and sells securities directly in your account.

  • You can track every transaction.

  • You pay fees for management and performance.

Think of PMS as having a personal chef instead of ordering from a buffet.

 

Types of PMS: Which One Fits You?

• Discretionary PMS

The portfolio manager takes all decisions. You simply sit back and watch.

• Non-Discretionary PMS

Manager suggests, but you approve every buy/sell. This is more time-consuming.

• Advisory PMS

Only advice is given; execution is your responsibility.

Each type comes with different taxation and compliance responsibilities—which is why understanding them matters.

 

Who Can Offer PMS? SEBI Rules Explained

Only those registered with SEBI can legally run a PMS.

Key eligibility rules:

  • Net worth of minimum ₹5 crore for PMS provider

  • Mandatory SEBI registration certificate

  • Periodic compliance and audits

  • Transparent reporting to investors

This is where sebi registered cases become important.

 

SEBI Registered Cases vs SEBI NON Registered Cases

✔ SEBI Registered Cases

These are cases where the PMS provider:

  • Has valid SEBI approval

  • Follows compliance

  • Files reports

  • Maintains investor transparency

  • Can be held accountable in disputes

✘ SEBI NON Registered Cases

This includes:

  • Unregistered advisors

  • Telegram/WhatsApp tip providers

  • Social media influencers giving stock calls

  • Consultants charging for tips without SEBI license

These are illegal activities under SEBI guidelines.

Why it matters:
If an investor falls into sebi NON registered cases, SEBI cannot help you recover losses or take direct action.

 

Why Choosing SEBI-Registered PMS Matters

Picking a SEBI-registered entity is like choosing a licensed doctor over a street healer.

Here’s what you gain:

  • Protection under SEBI regulations

  • Mandatory reporting

  • Transparency in fees and performance

  • Clear complaint redressal

  • Legal action possible in case of fraud

Key Tip:
Always cross-check SEBI registration before investing.

 

Taxation Consultancy for PMS Investors

Taxation under PMS is often misunderstood. Unlike mutual funds—where AMC pays the tax—PMS investors must individually file capital gains tax.

A PMS tax consultant ensures you don’t overpay taxes or miss crucial filings.

A good taxation consultancy helps with:

  • Capital gains computation

  • Set-off and carry-forward losses

  • Advance tax

  • GST compliance

  • Annual reporting

 

How PMS Income Is Taxed – A Simple Breakdown

• Short-Term Capital Gains (STCG)

If shares are sold within 12 months:

  • Tax rate: 15%

• Long-Term Capital Gains (LTCG)

If held for more than 12 months:

  • First ₹1 lakh: Tax-free

  • Above ₹1 lakh: 10%

• Dividend Income

  • Taxed as per your income tax slab.

• Interest Income (for debt PMS)

  • Taxed as "Income from Other Sources".

Important:
PMS does not enjoy the same tax benefits as mutual funds.

 

Taxation of Equity PMS vs Debt PMS

✔ Equity PMS

Taxed like direct equity:

  • STCG: 15%

  • LTCG: 10%

✔ Debt PMS

Taxed differently:

  • No indexation benefit

  • Entire gain added to income

  • Taxed as per slab

Debt PMS taxation often surprises new investors—this is where good consultancy helps.



GST, Fees & Other Charges in PMS

Apart from taxes, PMS investors pay:

  • GST @18% on management fees

  • Performance fees (profit-sharing model)

  • Brokerage charges

  • STT (Securities Transaction Tax)

  • Stamp duty

  • Custodian fee

Understanding these reduces confusion during year-end taxation.

 

Common Compliance Mistakes Investors Make

1. Investing through unregistered entities

Leading to sebi NON registered cases.

2. Ignoring tax reporting

PMS generates multiple transactions, often confusing for individuals.

3. Not paying advance tax

This leads to interest penalties.

4. Missing SEBI disclosures

Investors often don't review quarterly PMS statements.

Compliance awareness is essential for long-term success.

 

How to Verify SEBI Registration Before Investing

Step-by-step:

  1. Visit SEBI’s official website

  2. Access “Intermediaries/Market Infrastructure Institutions”

  3. Locate PMS list

  4. Search by name or registration number

  5. Confirm validity and compliance history

Never rely on screenshots or forwarded certificates.

 

Risk Factors You Must Know in PMS

PMS is not risk-free. Key risks include:

  • Market volatility

  • Concentrated stock portfolios

  • High drawdowns

  • Higher fees compared to mutual funds

  • Less liquidity

Profit potential is high—but so is risk.

 

Portfolio Reporting & Audit Rules Under SEBI

SEBI ensures transparency by mandating:

  • Monthly statements

  • Quarterly portfolio disclosure

  • Annual performance reports

  • Independent audits

  • Performance reporting as per SEBI format

This protects investors from manipulation.

 

Conclusion

Portfolio Management Scheme SEBI is a powerful investment option—when used wisely. Always choose SEBI-registered entities, avoid sebi NON registered cases, and follow taxation rules carefully. With proper compliance and taxation consultancy, PMS can help you grow wealth while staying on the right side of the law.

 

FAQs

1. What is a Portfolio Management Scheme SEBI and who can invest in it?

A PMS is an expert-managed investment service regulated by SEBI. It is ideal for investors with high capital (minimum ₹50 lakh).

2. How do sebi registered cases differ from sebi NON registered cases?

SEBI-registered cases involve licensed PMS providers, while NON-registered cases involve illegal advisors, tip providers or unregistered consultants.

3. How is PMS taxed under Indian tax laws?

PMS investors must individually pay capital gains tax according to STCG/LTCG rules. GST is also charged on PMS fees.

4. Are PMS returns guaranteed?

No. PMS returns depend on market conditions and portfolio strategy. SEBI prohibits guaranteed returns.

5. How can I verify if a PMS provider is SEBI registered?

Visit SEBI’s official website and search the PMS list to confirm validity.