What Is Portfolio Management Service?
Discover how professional portfolio managers can help you achieve your financial goals with customized investment strategies.
Understanding PMS
Portfolio Management Services (PMS) in India are SEBI-regulated investment solutions designed for HNIs, UHNIs, NRIs, and institutions seeking personalized and actively managed portfolios. With a minimum investment of ₹50 lakhs, PMS offers access to expert portfolio managers, deep research-driven strategies, and transparent reporting.
At Bharat Alternates, we empower you to invest in elite PMS strategies that are thoroughly researched, high-performing, and tailored to your financial goals.
Key Highlights of PMS
Personalized Investment Strategy
PMS is designed to align with the unique financial objectives of each client, offering personalized portfolios managed by experienced fund managers.
Active Portfolio Management
Professional portfolio managers actively monitor, rebalance, and optimize the portfolio based on market movements, sectoral trends, and economic outlook.
Transparency & Control
Clients have direct ownership of securities and can access real-time performance reports and transaction updates, ensuring transparency and control over investments.
Diversification
Portfolios are diversified across asset classes, sectors, and instruments to mitigate risks and enhance long-term wealth creation.
Types of Portfolio Management Services in India
When it comes to personalized investment management, Portfolio Management Services (PMS) in India are offered in three distinct formats. Each type caters to different levels of investor involvement and control over investment decisions.
In Discretionary PMS, the portfolio manager has full authority to make investment decisions on behalf of the client. This includes selecting stocks, timing the market, and adjusting the portfolio as needed—without needing prior client approval.
Key Features:
- Expert decision making
- Quick execution of trades
- Hands-off approach for investors
Best For:
- • Investors who prefer a hands-off approach
- • HNIs who trust expert judgment for wealth creation
- • Busy professionals lacking time for active management
Key Benefit:
Quick, professional decisions aligned with the client's goals
Under Non-Discretionary PMS, the portfolio manager advises and recommends investments, but final decisions are made by the client. The manager executes transactions only after obtaining the client's approval.
Key Features:
- Expert guidance and recommendations
- Client retains decision control
- Collaborative investment approach
Best For:
- • Investors who want to stay involved in decision-making
- • Investors with market knowledge seeking strategic support
- • Those seeking expert validation for their ideas
Key Benefit:
Client has control, but with professional guidance
Advisory PMS offers purely investment advice. The PMS provider suggests potential investment opportunities based on market research, but the client independently executes the trades through their own brokerage accounts.
Key Features:
- Professional market insights
- Complete client control
- Flexible consultation model
Best For:
- • Investors who want expert insights but prefer managing execution
- • Market-savvy individuals looking for expert opinions
- • Experienced traders wanting research-based suggestions
Key Benefit:
Access to professional research without surrendering control
Comparison Table: Types of Portfolio Management Services (PMS) in India
Understanding the key differences between Discretionary, Non-Discretionary, and Advisory PMS
| Feature / Type | Discretionary PMS | Non-Discretionary PMS | Advisory PMS |
|---|---|---|---|
| Decision-Making Authority | Portfolio Manager makes all investment decisions | Client approves every decision | Client makes all decisions based on advisor's input |
| Execution of Trades | Handled by Portfolio Manager | Done after client approval | Client executes trades independently |
| Client Involvement | Minimal | Moderate | High |
| Best Suited For | Busy investors preferring professional management | Investors wanting guidance but retaining control | Market-savvy individuals wanting expert advice |
| Control Over Portfolio | Low | Medium | High |
| Time Commitment Required | Low | Medium | High |
| Access to Expert Research | |||
| Investment Strategy Customization | |||
| Typical User Profile | HNIs, UHNIs, NRIs seeking hands-free investing | Experienced investors wanting oversight | DIY investors seeking research-based suggestions |
Tip: Consider your investment style, time availability, and desire for control when choosing a PMS type. Most of the PMS are Discretionary PMS.
What are the advantages of Portfolio Management Services?
A Smart Investor's Perspective
Strategic Investment Edge
" In a dynamic financial landscape, where markets fluctuate and investment decisions require precision, Portfolio Management Services (PMS) offer a strategic edge for serious investors. For high-net-worth individuals (HNIs), PMS is more than just a wealth management tool—it's a bespoke investment solution that aligns financial strategies with personal aspirations. "
Expert-Driven Approach
Unlike traditional investment options like mutual funds, PMS offers tailored investment strategies curated by expert portfolio managers. These services are ideal for seasoned investors looking for customized, research-driven solutions to build long-term wealth.
Tailored Strategy
Customized portfolio management aligned with your goals
Research-Driven
Data-backed investment decisions for optimal returns
Why Choose PMS Over Mutual Funds?
Understanding the key differences between these investment vehicles
Comparison: PMS vs Mutual Funds
| Feature | PMS | Mutual Funds |
|---|---|---|
| Ownership | Direct (in your name) | Pooled (in fund's name) |
| Customization | High – tailored to your goals | Low – standard schemes |
| Portfolio Concentration | Focused (15–25 stocks) | Diversified (50–70 stocks) |
| Reporting Transparency | Detailed, Real-time | NAV-based, periodic |
| Investment Control | Managerial/Personalized | Fund Manager controlled |
Performance Comparison: PMS vs Mutual Funds
5-Year CAGR (%) as of 31/03/2025
Portfolio Management Services (PMS) That Think Beyond Average
Trending Now: Why PMS is Gaining Unstoppable Momentum in India (2024–25)
The Indian equity market is thriving, and Portfolio Management Services (PMS) are at the forefront of this investment revolution.
Ready to Leverage These Market Trends?
Our PMS strategies are designed to capitalize on these emerging opportunities while managing risk.
Why PMS Is The Preferred Investment Choice in 2024-25?
As India's economy grows, PMS is becoming the preferred option for high-net-worth individuals (HNIs), ultra-high-net-worth individuals (UHNIs), and NRIs seeking customized investment solutions. Here's why PMS is increasingly gaining traction:
How to Start Investing in PMS
The Onboarding Process Simplified
🚀Get Started with PMS in 7 Simple Steps
Investing in a Portfolio Management Service (PMS) is easier than you think! Here's how it works, step-by-step:
Taxation of Portfolio Management Services (PMS) in India – FY 2024–25
Understand How Your PMS Investments Are Taxed
Portfolio Management Services (PMS) offer customized, actively managed investment portfolios tailored to individual goals. However, understanding the tax implications of PMS is crucial for planning and optimizing your returns. Here's a comprehensive breakdown of how PMS is taxed in India.
1Ownership Structure in PMS
In PMS, all securities—such as stocks and bonds—are held in the name of the investor, not in a pooled structure like mutual funds. This means:
Tax liability arises directly in the investor's hands
All profits/losses, dividends, and interest are reflected in your own account
2Types of Tax Liabilities in PMS
PMS investors may face three primary tax components:
A. Capital Gains Tax
This applies to profits made from the buying and selling of securities (mostly stocks).
🟢Listed Equity Shares
PMS Tax Summary
| Tax Type | PMS Tax Rule |
|---|---|
| Short-Term Gains | Taxed @20% |
| Long-Term Gains | Taxed @12% above ₹1.25L exemption |
| Dividends | Taxed as per investor's slab |
🔷Unlisted Shares, Bonds, or Debt Instruments
Short-Term (held <36 months): Taxed at slab rate
Long-Term (held >36 months): Taxed at 20% with indexation
Note: Portfolio managers provide detailed capital gain statements to assist in filing returns.
B. Dividend Income
Dividends received from companies in the PMS portfolio are added to the investor's income and taxed at their applicable slab rate.
For HNIs, this could be 30% or higher (plus surcharge and cess).
TDS (Tax Deducted at Source) of 10% is applicable if dividend income exceeds ₹50 from a company in a financial year.
C. Interest Income (if any)
In case the PMS portfolio includes bonds, NCDs, or other debt instruments, any interest earned is taxable as 'Income from Other Sources' at the investor's income tax slab rate.
3Tax Treatment of PMS Fees & Charges
PMS typically includes charges like management fees, brokerage, audit fees, and custodian charges. Here's how these are treated:
✅Can You Claim PMS Expenses?
Yes—but only against capital gains. Under the Income Tax Act:
Fees and charges (other than STT) can be claimed as a deduction from capital gains under Section 48.
Expenses must be invoiced and paid separately from the investment corpus.
This is applicable only for non-discretionary PMS (in most interpretations), but investors can check with their tax advisors.
❌Note:
STT (Securities Transaction Tax), GST, and entry/exit load charges cannot be claimed as deductions.
4Advance Tax Applicability
Since the tax liability is on the investor, advance tax provisions apply. You must estimate and pay advance tax quarterly if:
Your total tax liability for the year exceeds ₹10,000
Capital gains/dividend income through PMS are not subject to TDS in full
Avoid interest under Sections 234B & 234C by planning quarterly tax payments.
5Tax Filing & Documentation
Your PMS provider will give:
Realized Gain Reports (STCG/LTCG)
Dividend and Interest Statements
Expense Summary for Fee Deduction
Audit Reports (if applicable)
These are crucial for accurate ITR filing, usually under ITR-2 or ITR-3, depending on other income sources.
Debunking Common Myths About Portfolio Management Services (PMS)
Despite growing awareness, several misconceptions surround PMS in India
The Truth Behind PMS Myths
At Bharat Alternates, we believe in empowering investors with clarity and facts. Here's the truth behind the most common PMS myths:
PMS is only for ultra-rich investors
Myth
Reality
SEBI has made PMS accessible to investors with ₹50 lakhs+
PMS strategies are high-risk and inconsistent
Myth
Reality
Depends on the fund — many PMS consistently outperform indices like Nifty 50
PMS lacks transparency compared to mutual funds
Myth
Reality
PMS offers complete visibility — direct stock ownership + real-time reports
Mutual funds are always cheaper than PMS
Myth
Reality
PMS may have higher costs, but offers alpha, flexibility, and lower churn
You can't exit PMS investments easily
Myth
Reality
PMS offers better liquidity than most alternatives — usually T+3 settlement
Our PMS Evaluation Framework
We use 8 critical factors to rate PMS:
Manager Track Record
Stock Selection Process
Sector Allocation
Portfolio Churn
Historical Drawdowns
Return Consistency
Volatility Index
Fee Structure
Not Sure Which PMS Is Right for You?
Every investor's journey is unique. That's why we use a simple 8-point framework to help you quietly assess what truly fits your goals — no jargon, no hard sell.
We'll share a custom PMS Scorecard, walk you through it, and answer any questions you have.
If it helps, great. If not, no pressure.
Frequently Asked Questions
Get answers to common questions about Portfolio Management Services
What is PMS?
Portfolio Management Service (PMS) is a professional investment service where expert managers handle your investment portfolio. They create and manage a customized portfolio based on your financial goals and risk appetite.
What is equity PMS?
Equity PMS focuses on investing in stocks and equity-related instruments. Portfolio managers select stocks based on thorough research and market analysis to generate higher returns over the long term.
- Active stock selection and monitoring
- Higher return potential with managed risk
What is debt PMS?
Debt PMS invests in fixed-income securities like bonds, government securities, and other debt instruments. It aims to provide steady returns with lower risk compared to equity investments.
- Regular income generation
- Lower volatility than equity
What is the minimum investment?
The minimum investment amount typically ranges from ₹50 lakh to ₹1 crore, depending on the portfolio manager and strategy.
Who can invest in PMS?
- High Net Worth Individuals (HNIs)
- Corporate entities and institutions
- NRIs (subject to FEMA regulations)
What are the tax implications?
- • Long-term capital gains: 10% above ₹1 lakh
- • Short-term capital gains: 15%
- • Dividends taxed at applicable slab rates
What are the risks involved?
- • Market volatility risk
- • Concentration risk
- • Manager-specific risk
- • Liquidity risk
How is PMS different from mutual funds?
- • Customized portfolio
- • Direct ownership of securities
- • Higher minimum investment
- • More personalized service
Is GST applicable on PMS fees?
👉 Yes, 18% GST is applicable on management and advisory fees.
Are PMS profits taxed like mutual funds?
👉 No. In PMS, the tax is borne directly by the investor, unlike mutual funds where AMC handles tax on certain income streams.
Do I need to file ITR if I invest in PMS?
👉 Yes, even NRIs and HNIs investing through PMS must file ITR if they earn taxable income from capital gains, dividends, or interest.
Ready to Start Your PMS Journey?
Let our expert portfolio managers help you create a customized investment strategy aligned with your financial goals.