SEBI 2024 Disclosure Rule: Half-Yearly Returns, Yield and Colour-Coded Riskometer You Can Now Check

On 5 November 2024, the Securities and Exchange Board of India (SEBI) issued circular SEBI/HO/IMD/PoD1/CIR/P/2024/150, mandating that every mutual fund scheme disclose, in a single standardised layout, its expenses, half-yearly returns, yield and a colour-coded riskometer. For the first time, a debt-fund investor can line up two versions of the same portfolio - the Direct Plan and the Regular Plan - and read, side by side, exactly how much the distributor commission baked into the Regular Plan drags down the return. This piece uses that disclosure to answer one narrow question: for a debt-fund investor chasing net post-tax income, is the Direct Plan or the Regular Plan the better pick?

The stakes are larger than they look. A Regular Plan carries a higher total expense ratio (TER) because it pays a trail commission to the distributor, and that difference compounds silently every single day the money stays invested. SEBI's November 2024 rule does not change the arithmetic; it simply forces the two yield figures into the open so you can compare them before you commit. Below we translate the disclosure into rupees, then work through the tax treatment that decides what you actually keep.

Side-by-Side Comparison

Both plans of a debt fund hold the identical securities, run by the same fund manager, with the same yield to maturity. The only structural difference is the expense ratio: the Regular Plan embeds a distributor trail commission, while the Direct Plan, introduced by SEBI from 1 January 2013, has none. SEBI's 5 November 2024 circular now requires both the annualised yield and the half-yearly returns of each plan to be published in the same standard format, so the gap is no longer buried in a fact sheet footnote.

The table below sets out the two plans on the parameters the November 2024 disclosure standardises. The TER figures are illustrative of a typical medium-duration debt scheme and are shown only to demonstrate the arithmetic; you must read the actual, scheme-specific numbers from the disclosure itself before deciding.

The single line that matters is the illustrative 0.70% gap in TER, which flows straight through to the disclosed yield. On an investment of Rs 10 lakh, a 0.70% annual cost difference is Rs 7,000 in the first year alone; because the drag applies to the growing corpus each year, over a 10-year horizon at otherwise identical gross returns the Regular Plan investor typically surrenders well over Rs 90,000 to commission. You can model your own figure using our lumpsum calculator by running the same gross return with the two different net-of-expense yields.

SEBI's disclosure also standardises the net asset value history and half-yearly returns, so the comparison is not a projection you have to trust - it is two audited numbers printed against each other. Since the November 2024 circular, the riskometer accompanying each scheme uses the six-level colour-coded scale SEBI has required since its riskometer overhaul: Low, Low to Moderate, Moderate, Moderately High, High and Very High. Because the Direct and Regular Plans hold the same debt fund portfolio, their riskometer band is always identical - the risk you take is the same; only the cost differs.

Why the cost gap compounds

A common misreading is that a 0.70% expense difference is trivial against a 7% yield. It is not, for two reasons rooted in the November 2024 disclosure. First, the cost is levied on the entire corpus every year, not on the return, so a Rs 25 lakh holding loses Rs 17,500 in year one to that 0.70% gap regardless of whether the fund gains or loses. Second, the money paid as commission never gets to compound for you, so the shortfall widens each year the money stays invested. The half-yearly return column SEBI mandated in the 5 November 2024 circular makes this visible over rolling six-month windows rather than a single annualised headline.

Tax Treatment

Cost is only half the story; tax decides what reaches your bank account. Debt mutual funds bought on or after 1 April 2023 are taxed under the rules introduced by the Finance Act 2023: the entire gain, irrespective of holding period, is added to your income and taxed at your applicable slab rate, with no long-term capital gains concession and no indexation benefit. The published yield in SEBI's November 2024 disclosure is a pre-tax figure, so the slab you fall into changes the ranking of one debt fund against another for you personally.

The slab rates that apply to those debt-fund gains are the standard income-tax slabs. Under the new regime for FY 2025-26, income up to Rs 4,00,000 is taxed at 0%, the Rs 4,00,000 to Rs 8,00,000 band at 5%, Rs 8,00,000 to Rs 12,00,000 at 10%, Rs 12,00,000 to Rs 16,00,000 at 15%, Rs 16,00,000 to Rs 20,00,000 at 20%, Rs 20,00,000 to Rs 24,00,000 at 25%, and income above Rs 24,00,000 at 30%. A health and education cess of 4% applies on top of the tax. The Section 87A rebate under the new regime is now Rs 60,000 for total income up to Rs 12,00,000, which can extinguish tax entirely for smaller investors.

Equity-oriented funds are taxed on a completely different footing, which matters when a reader is weighing a debt fund against an equity or hybrid alternative. The table below sets out the current statutory rates from the platform's rate configuration, all effective from the Budget 2024 changes dated 23 July 2024.

Two cautions follow directly from these rates. The equity LTCG exemption of Rs 1,25,000 per financial year is per taxpayer, not per fund, so splitting money across Direct and Regular Plans of an equity fund does not multiply the exemption. And because a debt fund's entire gain is taxed at slab, a 30%-bracket investor keeps far less of the same disclosed yield than a 5%-bracket investor - which is precisely why the November 2024 yield disclosure must be read as pre-tax. The surcharge on very high incomes is capped at 25% in the new regime, not the 37% that applies in the old regime above Rs 5 crore.

Who Should Pick Which

For the overwhelming majority of debt-fund investors, the Direct Plan is the mathematically superior choice, because the illustrative 0.70% annual saving is certain while any value a distributor adds is not. The SEBI disclosure introduced on 5 November 2024 exists precisely to let you see that certain saving before you invest. But "mostly Direct" is not "always Direct", so match the plan to your profile.

Choose the Direct Plan if you are comfortable selecting a scheme yourself, can read the standardised yield and riskometer disclosure without hand-holding, and intend to stay invested for three years or more so the annual cost saving compounds meaningfully. On a Rs 10 lakh holding, the illustrative 0.70% gap saves roughly Rs 7,000 in the first year and materially more thereafter; over a full SIP horizon that compounding is exactly what our SIP calculator is built to project when you plug in the two net yields.

Choose the Regular Plan only if the distributor demonstrably earns the commission - for example, by keeping you invested through volatility, rebalancing across your goals, or handling paperwork you would otherwise skip. The behavioural gap is real: an investor who panics and redeems at the wrong time can lose more than the 0.70% annual TER difference in a single poor decision. If you value that guidance, the Regular Plan's higher cost, disclosed transparently since November 2024, may be money well spent.

Investors in the 30% slab deserve a special note. Because debt-fund gains are taxed at slab under the Finance Act 2023 rules, a top-bracket investor should first ask whether a debt fund is even the right wrapper, or whether tax-free accruals such as the Public Provident Fund - currently 7.1% for the July to September 2026 quarter per the platform's rate configuration - or an equity-oriented allocation taxed at the gentler 12.5% LTCG rate would serve better. Model the PPF alternative with our PPF calculator before locking a large sum into a slab-taxed debt fund.

FAQ

What exactly does the SEBI 5 November 2024 circular require funds to disclose?

Circular SEBI/HO/IMD/PoD1/CIR/P/2024/150, dated 5 November 2024, mandates a standardised disclosure of a scheme's expenses, its half-yearly returns, its yield and a colour-coded riskometer. The purpose is to let investors compare the cost and return of different schemes - and the Direct versus Regular Plans of the same scheme - in a single consistent format rather than hunting through separate documents.

Is the disclosed yield the return I will actually earn?

No. The yield disclosed under the November 2024 rule is a pre-tax, post-expense annualised figure based on the current portfolio; it is not a guaranteed or historical return. For debt funds bought on or after 1 April 2023, your realised return is further reduced by tax at your slab rate under the Finance Act 2023, so a 30%-bracket investor keeps materially less of the headline yield than the number suggests.

How much does the Regular Plan actually cost me over a Direct Plan?

It depends on the scheme-specific TER gap you read in the disclosure. Using an illustrative 0.70% annual difference on a Rs 10 lakh holding, the Regular Plan costs about Rs 7,000 in the first year, rising each year as the corpus grows, because the charge applies to the whole corpus and the commission never compounds for you. Always read the actual TER of both plans from the SEBI-mandated disclosure rather than assuming a figure.

Do the Direct and Regular Plans have different riskometer bands?

No. Since both plans hold the identical portfolio, their colour-coded riskometer band under the November 2024 disclosure is always the same. The riskometer uses SEBI's six-level scale - Low, Low to Moderate, Moderate, Moderately High, High and Very High. Only the cost and the resulting net yield differ between the two plans.

How are debt mutual fund gains taxed in 2026?

For units bought on or after 1 April 2023, the Finance Act 2023 removed the long-term capital gains concession and indexation, so the entire gain is added to your income and taxed at your slab rate. Under the FY 2025-26 new regime, that ranges from 0% up to Rs 4,00,000 of income to 30% above Rs 24,00,000, plus a 4% cess. Units bought before 1 April 2023 and held over 24 months are taxed at 12.5% without indexation following the 23 July 2024 Budget changes.

Can I switch my existing Regular Plan holding to a Direct Plan?

You can, but a switch is treated as a redemption and fresh purchase for tax purposes, which can trigger a taxable gain. For debt funds bought on or after 1 April 2023, that gain is taxed at your slab rate, so weigh the certain future TER saving against the immediate tax cost. The November 2024 disclosure helps you quantify the ongoing saving before you decide.

Where can I verify these disclosure and tax rules myself?

The disclosure requirement is in SEBI's circular of 5 November 2024, available on sebi.gov.in, and current scheme yields and riskometers are published by fund houses and aggregated on amfiindia.com. The capital-gains and slab rules are set out in the Income-tax Act as amended by the Finance Act 2023 and Budget 2024, available on incometax.gov.in. Always confirm scheme-specific figures against the primary source before investing.