1. Can I invest in SIFs through SIP?

  • Yes, SIPs (Systematic Investment Plans) are allowed.
  • The total SIP amount across all instalments must meet the ₹10 lakh minimum investment threshold (PAN level, per AMC).
  • SIPs that don’t meet this threshold will be rejected or not processed.


2. Are SWP (Systematic Withdrawal Plan) and STP (Systematic Transfer Plan) allowed?

  • Yes, both are allowed provided the ₹10 lakh minimum investment is maintained.
  • Withdrawal via SWP shouldn’t reduce your investment below ₹10 lakh.
  • STP (to/from other schemes) is allowed if the target scheme also qualifies (i.e., meets the minimum investment rules). 


 3. What is the minimum investment amount for SIFs?

  • ₹10 lakh per investor per AMC, across all SIF schemes (not per scheme).
  • This is calculated at the PAN level.
  • Example: If you invest ₹5 lakh in SIF A and ₹5 lakh in SIF B (same AMC), you meet the ₹10 lakh rule.


 4. Can I switch from one SIF scheme to another?

  • Yes, you can switch between SIF schemes under the same AMC, but:
  • Both the source and target schemes must be SIF-compliant.
  • Post-switch holdings in both schemes must comply with the ₹10 lakh minimum (if partial switch is attempted).


5. Can I switch from a regular mutual fund to a SIF (or vice versa)?

  • Switch-ins to SIFs from regular MF schemes are allowed only if ₹10 lakh minimum is met.
  • Switch-outs from SIFs to non-SIF schemes are allowed, but:
  • Must follow AMC-specific rules.
  • May trigger taxation or minimum holding requirements. 


6. How often can I redeem from a SIF?

  • Redemption frequency is scheme-specific and may be:
  • Daily
  • Weekly
  • Monthly
  • With or without lock-in periods
  • Check scheme documents for:
  • Liquidity windows
  • Exit load
  • Lock-in or soft lock-in periods


7. Can I make additional purchases (top-ups) in a SIF?

  • Yes, but:
  • The combined investment (initial + top-ups) must meet or maintain the ₹10 lakh minimum.
  • Some schemes may define minimum top-up amounts (e.g. ₹1 lakh or ₹5 lakh).


8. Are there lock-in periods for SIFs?

  • Lock-in is not mandatory under SEBI rules, but:
  • AMCs may define lock-in periods based on strategy
  • Lock-in must be clearly stated in the scheme information document (SID)


9. How is the NAV calculated and reported for SIFs?

  • NAV is published: Daily or as per scheme frequency on AMC websites, RTAs, and platforms like AMFI.
  • Redemptions are processed based on the applicable NAV (e.g., T+1, T+2)


10. Are partial redemptions allowed?

  • Yes, but your remaining balance in the scheme must be ≥ ₹10 lakh, unless you're fully exiting.
  • If redemption reduces your holding below the threshold, the AMC may:
  • Reject the transaction, or
  • Process it as a full redemption


11. Are joint holding and minor investments allowed in SIFs?

  • Yes, but:
  • Each PAN holder in a joint holding must satisfy eligibility requirements.
  • Minor investments are typically not allowed, unless explicitly stated by the AMC.


12. How are SIF transactions taxed?

  • Taxation is same as mutual funds, depending on the scheme's classification:
  • Equity-oriented SIFs: 15% STCG / 10% LTCG (after ₹1 lakh exemption)
  • Debt-oriented SIFs: STCG taxed as per income slab; LTCG rules removed after April 1, 2023

 

 Minimum threshold requirement and consequences of non- maintenance: 

The AMC shall ensure that an aggregate investment by an investor across all investment strategies offered by the SIF, at the Permanent Account Number (‘PAN’) level, is not less than INR 10 lakh. Provided that the requirement of minimum investment amount shall not apply to an accredited investor. Provided that, the above provisions shall not be applicable for mandatory investments made by AMC for designated employees under paragraph 6.10 of the Master Circular for Mutual Funds dated June 27, 2024. The AMC shall monitor compliance with the Minimum Investment Threshold on a daily basis and ensure that there are no active breaches. The AMC shall ensure that the investor's total investment value does not fall below the Minimum Investment Threshold due to redemption transactions initiated by the investor.


Passive breaches (occurrence of instances not arising out of omission and commission by AMC), such as those caused by a decline in Net Asset Value (NAV), shall not be treated as a violation of the Minimum Investment Threshold. However, if the total investment value falls below the threshold due to a passive breach, the investor shall only be permitted to redeem the entire remaining investment amount from the SIF.


 Active Breaches shall mean fall in the aggregate value of an investor’s total investment across all investment strategies of SIF, below the Minimum Investment Threshold of INR 10 lakh, on account of any transactions (i.e. redemption, transfer, sale etc.) initiated by the investor. 


In case of any active breach of the Minimum Investment Threshold by an investor including through transactions on stock exchanges or off-market transfers: 


(a) All units of such investor held across investment strategies of the concerned SIF shall be frozen for debit, and 

(b) A notice of 30 calendar days shall be given to such investor to rebalance the investments in order to comply with the Minimum Investment Threshold. 


Pursuant to the said notice issued to the investor: 

  1. In case investor rebalances his/her investments in SIF within the notice period of 30 calendar days, the units of SIF of such investor shall be unfreezed, and no further action shall be taken with regard to compliance with Minimum Investment Threshold.
  2.  In case the investor fails to rebalance the investments within the aforesaid 30    calendar day period, the frozen units shall be automatically redeemed by the AMC, at the applicable Net Asset Value of the next immediate business day after the 30th calendar day of the notice period.


Fund houses offering Specialized Investment Funds (SIFs) must freeze units if an investor’s holding falls below the minimum investment threshold of Rs. 10 lakh.

 However, this requirement applies only in cases of active breach, such as redemptions or switch transfers. 

 

Passive breaches—where the investment value drops below the threshold due to market movements—will not trigger this rule.