Q: Can you provide examples of how advisory fees are adjusted when a client withdraws funds?
A: If a customer opens an account on 1st January 2025 with an investment of ₹20,00,000, the advance annual advisory fee will be charged at 1.50% p.a., along with 18% GST.
In the event of a partial withdrawal of ₹15,00,000 on 1st August 2025, the advisory fee already collected on the withdrawn amount will be refunded on a pro-rata basis for the remaining period—from the date of withdrawal (1st August) until the account anniversary (31st December).
The refund will be calculated based on the excess advisory fee collected on the withdrawn amount of ₹15,00,000 for the unused period, and the corresponding GST component will also be refunded.
Date | Event | Amount (₹) | Fee Rate / Method | Fee (₹) | GST (18%) (₹) | Total Fee (₹) | Notes |
Jan 1st, 2025 | Initial Investment | 20,00,000 | 1.50% Annual Flat | 30,000 | 5,400.00 | 35,400 | Fee paid upfront for full year |
Aug 1st, 2025 | Partial Withdrawal | -15,00,000 | Refund for unused 152 days | -9,370 | -1,687 | -11,057 | Refund of advisory fee and GST |
Refund Illustration – Partial Withdrawal Before Account Anniversary
Description | Formula | | GST 18% | Total (₹) |
Advance fee collected on
₹20,00,000 | ₹20,00,000 × 1.50% | 30,000 | 5,400 | 35,400 |
Actual Fee due for the year |
|
|
|
|
For 213 days on ₹20,00,000 (1st Jan - 1st Aug) | ₹20,00,000 × 1.50% × (213 ÷ 365) | 17,507 | 3,151 | 20,658 |
For 152 days on ₹5,00,000 | ₹5,00,000 × 1.50% × (152÷365) | 3,123 | 562 | 3,685 |
Total Fee due for the year |
|
|
|
|
Refund amount | ₹15,00,000 × 1.50% × (152 ÷ 365) | 9,370 | 1,687 | 11,057 |
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