India’s capital markets regulator, the Securities and Exchange Board of India (SEBI), on Wednesday, December 17, 2025, approved a significant overhaul of mutual fund expense ratio norms. The move aims to reduce investor costs, enhance transparency, and increase retail participation in mutual funds.
Under the revised framework, the Total Expense Ratio (TER) has been redefined as the Base Expense Ratio (BER). Importantly, the BER will exclude statutory and regulatory levies such as GST, stamp duty, SEBI fees, and exchange charges. SEBI clarified that the TER will not be calculated as a simple addition of BER and statutory levies, marking a clear departure from earlier practices.
The regulator has lowered expense ratio ceilings across index funds, ETFs, fund of funds (FoFs), equity-oriented schemes, non-equity schemes, and closed-ended schemes.
| Category | Current (incl. statutory levies) | Revised BER (excl. levies) |
| Index Funds / ETFs | 1.00% | 0.90% |
| FoF Category | Current (%) | Revised BER (%) |
| FoFs investing in liquid schemes / index funds / ETFs | 1.00% | 0.90% |
| FoFs investing ≥65% of AUM in equity-oriented schemes | 2.25% | 2.10% |
| Other FoFs | 2.00% | 1.85% |
| AUM Size | Current (%) | Revised BER (%) |
| Up to ₹500 crore | 2.25% | 2.10% |
| ₹500–750 crore | 2.00% | 1.90% |
| ₹750–2,000 crore | 1.75% | 1.60% |
| ₹2,000–5,000 crore | 1.60% | 1.50% |
| ₹5,000–10,000 crore | 1.50% | 1.40% |
| ₹10,000–15,000 crore | 1.45% | 1.35% |
| ₹15,000–20,000 crore | 1.40% | 1.30% |
| ₹20,000–25,000 crore | 1.35% | 1.25% |
| ₹25,000–30,000 crore | 1.30% | 1.20% |
| ₹30,000–35,000 crore | 1.25% | 1.15% |
| ₹35,000–40,000 crore | 1.20% | 1.10% |
| ₹40,000–45,000 crore | 1.15% | 1.05% |
| ₹45,000–50,000 crore | 1.10% | 1.00% |
| Above ₹50,000 crore | 1.05% | 0.95% |
| AUM Size | Current (%) | Revised BER (%) |
| Up to ₹500 crore | 2.00% | 1.85% |
| ₹500–750 crore | 1.75% | 1.65% |
| ₹750–2,000 crore | 1.50% | 1.40% |
| ₹2,000–5,000 crore | 1.35% | 1.25% |
| ₹5,000–10,000 crore | 1.25% | 1.15% |
| ₹10,000–15,000 crore | 1.20% | 1.10% |
| ₹15,000–20,000 crore | 1.15% | 1.05% |
| ₹20,000–25,000 crore | 1.10% | 1.00% |
| ₹25,000–30,000 crore | 1.05% | 0.95% |
| ₹30,000–35,000 crore | 1.00% | 0.90% |
| ₹35,000–40,000 crore | 0.95% | 0.85% |
| ₹40,000–45,000 crore | 0.90% | 0.80% |
| ₹45,000–50,000 crore | 0.85% | 0.75% |
| Above ₹50,000 crore | 0.80% | 0.70% |
| Scheme Type | Current (%) | Revised BER (%) |
| Equity-oriented | 1.25% | 1.00% |
| Other than equity-oriented | 1.00% | 0.80% |
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Dec 18, 2025, 10:03 AM IST
Sachin Gupta
Sachin Gupta is a Content Writer with 6+ years of experience in the stock market, including global markets like the US, Canada, and Australia. At Angel One, Sachin specialises in creating financial content that simplifies complex market trends. Sachin holds a Master's in Commerce, specialising in Economics.
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