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How to transfer MF units held in SOA?

When an Investor Invests in Mutual Funds, their units can be held in two ways:

Demat Form: Similar to shares held in a demat account
Statement of Account (SoA): It is a digital/physical record that is shared by the Asset Management Company (AMC) or through the Registrar and Transfer Agent (RTA) that possesses the details of your holdings.

Whilst demat account holdings are the “go-to-option” for stock market transactions, many first mutual fund investors still hold their units in SoA form. Therefore if one were to transfer these units to a joint holder, family member or to their own demat account then the process is quite different compared to usual share transfers.

What is the Meaning of SoA in Mutual Funds?

SoA refers to Statement of Account. It is basically a ledger style document that is issued by the AMC or RTA (CAMS, KFintech) that contains:

Fund Scheme Name and Folio Number
Number of Units Purchased
NAV at the period of purchase
Transaction History (Purchases, Redemptions, Switches)
Current Holding Value

The SOA acts as the proof of investments when units are held in physical mode (non-demat way). It is sent through email after each successful transaction and can be downloaded anytime from the RTA or AMC website. In contrast to a share certificate it is not tradable, but acts as a legal evidence of ownership of the units held.

Is it Possible to Transfer Units from One Demat to Another?

If the mutual funds purchased are already in demat mode then transferring them through one demat to another is possible, similar to how one transfers their shares.

Off-Market Transfer Form: Fill the DIS (Delivery Instruction Slip) that is issued to you by the depository participant (NSDL or CDSL).
Mention the ISIN and Scheme Details: Every Mutual Fund scheme in your demat account has an unique ISIN number (International Securities Identification Number)
Submit to DP: Once submitted the transfer takes place within a few working days.

In the case of Statement of Account (SoA) however, units held in it cannot be directly transferred like demat units. To Move them they need to be converted into demat (basically dematerializing your SOA)

Process Flow:

Visit the MF Central or RTA websites.
Go to “Unit transfer in SoA.”
Enter the transferor’s information (PAN, folio, etc.).
OTP confirmation via email and phone
Enter the MF schemes’ transfer data.
Verify the recipient’s information (phone OTP and email).

Points to Consider:

This feature is only accessible online through MF Central or RTA.
ETFs and solution-oriented plans (such as retirement plans and children’s plans) are not applicable.
If requested on the record date, dividends or payouts are credited to the transferor.
For ten days, transferred units cannot be redeemed.
Units must not be locked in, frozen, or subject to liens.
The transferee needs to already have a folio with the same AMC.
Both sides need to be “KYC Validated.”
FIFO (first-in, first-out) is the procedure used for transfers.
For individual RI/NRI unitholders only (no minors allowed)
The ARN, plan, option, and primary holder in the transferor’s folio are all unaltered.

Tax and Stamp Duty Implications

Type	Capital Gains (Transferor)	Stamp Duty (0.005%)	For Receiver
Transfer* to relatives	Applicable	Applicable	No tax
Gift to relatives	Not applicable	Not applicable	No tax
Transfer* to non-relatives	Applicable	Applicable	No tax
Gift to non-relatives	Not applicable	Not applicable	Slab rate^^

*Accepted as part of a transaction/consideration
^^No tax if gift value is up to ₹50,000. If it exceeds ₹50,000, entire amount becomes taxable.

Conclusion:

Transferring Mutual Funds Units that are held in SoA (Statement of Account) is a straightforward process once the concepts of demat and the the related formalities have been properly understood). By making sure that the proper documentation is adhered to, and being aware of all the applicable taxes and stamp duties you can move your holdings effectively without any disruptions.