What is a PMS?
A professionally run equity portfolio held in your own name: direct ownership of the shares, not units of a pooled fund. Here is the whole picture, in plain English.
PMS in four numbers.
You hand a SEBI-registered manager a mandate; they run a concentrated stock portfolio inside a demat account that belongs to you. Everything that matters flows from these four facts.
Who pulls the trigger is your choice.
Every PMS runs on one of three mandates. Pick the row; the difference is who approves each trade.
You hand the manager a written mandate and they buy and sell within that strategy without checking each trade with you. The default, and the bulk of the industry; you are buying the manager's judgement, not approving it order by order.
Three fee models. One decision.
The bars show where the manager earns: flat on everything, split with performance, or only above a hurdle.
A flat annual charge on the value managed, billed regardless of performance. Predictable, but you pay it in flat and down years too.
A smaller fixed fee plus a slice of gains above a hurdle. The structure most Indian HNIs actually pick; it splits the risk between you and the manager.
No fixed fee; the manager earns only on gains beyond an agreed hurdle rate, protected by a high-water mark so you never pay twice for the same recovery.
Your shares. Your tax events.
In a mutual fund, churn hides inside the wrapper until you redeem. A PMS has no wrapper: every sale the manager makes is a taxable event in your hands, lot by lot.
| On each sale | Holding period | Indicative rate (FY2025-26) |
|---|---|---|
| Short-term capital gain | Listed equity held ≤ 12 months | 20% |
| Long-term capital gain | Listed equity held > 12 months | 12.5% over ₹1.25 lakh / year |
| Fund-level shielding of churn | Not available | None; tax follows every trade |
A high-turnover PMS can hand you a meaningful tax bill in a strong year even if you never withdrew a rupee; a patient, low-churn strategy leans on the long-term rate. Rates are indicative; confirm your own position with a tax adviser.
Is it for you?
- You can commit ₹50 lakh and it is genuinely surplus, long-horizon capital
- You want a concentrated, conviction-led book, not another index in disguise
- You value seeing every holding, trade and fee at the security level
- You want a portfolio shaped to your mandate: sectors, exclusions, existing positions
- You need daily liquidity or may have to redeem at short notice
- ₹50 lakh would be a large share of your investable wealth
- You would rather not handle per-trade capital-gains tax admin yourself
- You prefer the built-in diversification of a 50-stock pooled fund
Nyra has already read every PMS factsheet.
Every SEBI-registered strategy, scored on the same 0–10 basis, with every answer citing its source. Ask her where your ₹50 lakh fits.
What people ask first.
₹50 lakh, the SEBI floor raised from ₹25 lakh in January 2020. It can be brought as cash, as an existing portfolio of securities, or a mix, but the value must clear ₹50 lakh at onboarding.
Related guides.
Educational content only, not investment or tax advice. Figures are indicative and current to FY2025-26; verify specifics, especially tax, with a qualified adviser. PMS, AIF and GIFT City investments are subject to market risk.