Finance Guru Speaks: Below pointers will provide you information on the importance of PAN card.
- Why has PAN been made compulsory for transacting in Mutual Funds?
Securities and Exchange Board of India (SEBI) vide their circulars MRD/DoP/Cir-05/2007 dated April 27, 2007, and MRD/DoP/Cir-08/2007 dated June 25, 2007, has made Permanent Account Number (PAN), the sole identification number for all participants transacting in the securities market, irrespective of the amount of transaction, effective July 2, 2007. Hence, all investors would compulsorily have to provide their PAN details along with the original PAN card for verification. - Which category of investors needs to provide PAN?
The requirement of PAN applies to - - All unitholders in the folio, including Guardian(s)
- Non-Resident Indian (NRI) investors as well
- Power of Attorney (PoA) holder,
- Lien Holder
- Do I need to submit PAN for all types of investments?
Yes, PAN needs to be submitted for all investments viz. New Purchases, Additional Purchases, Switches. New SIP registrations and in the event of Transmission of units or upon Minor becoming Major. - I wish to invest in Mutual Funds but I do not have a PAN. How do I go about it?
All existing and potential investors are permitted to invest in units of Mutual Fund only if he/she possesses a valid PAN card. Submission of PAN is mandatory for all investments as mentioned in point 3 above. - How do I apply for a PAN?
You may apply for a PAN at any of the agencies appointed by the Income Tax Department for accepting PAN applications. The website links for applying for PAN are as under -
- How do I get my PAN verified with the Mutual Fund?
Investors who do not have their PAN verified are requested to submit a copy of the PAN card along with the original PAN card for verification at our Investor Service Centre / CAMS Investor Service Centers. The original will be returned immediately across the counter after verification. - Do I need to attach a copy of my PAN card and provide my original PAN card for verification over the counter each time I invest?
No. This is a one-time process for investors who do not have their PAN verified in our records yet. Once the PAN is verified, it shall be useful for all future transactions. - Do I need to submit a copy of the PAN card only along with a fresh/additional investment, or can that be done at my convenience?
An investor must submit the PAN details along with all investments. However, if an investor has an existing folio, he/ she must get his/her PAN verified at the earliest, even if s/he wishes to transact at a later point in time. - I am a Non Resident Indian. Do I still need to have a PAN if I wish to invest in Indian Mutual Funds?
PAN has been made compulsory for all investors irrespective of the tax status or the amount of investment. - I have invested less than Rs. 50,000.00 in a Mutual Fund. Do I still need to have my PAN verified or would I be required to get my PAN verified only when my investment exceeds a valuation of Rs. 50,000.00?
Yes. Effective 1st January 2011 PAN has been made mandatory for any investment in Mutual Funds (as mentioned in point 3 above) irrespective of the investment amount. - I am not assessed for Income Tax. Am I still required to procure a PAN and get it verified?
Yes, PAN has been made compulsory for investing in units of Mutual Funds and also to strengthen the Know Your Client (KYC) norms. - I have procured a Mutual Fund Identification Number (MIN) recently and also undergone KYC compliance with your fund house. Is it mandatory for me to submit my PAN proof again?
Erstwhile MIN was a requirement to meet the obligations of the Prevention of Money Laundering Act, 2002 (PMLA). However, PAN is a requirement under SEBI regulations and also under Income Tax Act, 1961. Hence, you are required to get your PAN details verified.
KYC norms, however, remain unchanged and PAN is now the sole identification number. - Currently, I am out of India. Can I send a scanned copy of my PAN card or fax the same for verification?
No, you would be required to provide the original to verify the same. Alternatively, you may send a true copy of your PAN card attested by the Notary Public, Gazetted Officer, Manager of a Scheduled Commercial Bank (Name, Designation, and Seal should be affixed on the copy) or by an official from the local office of the Indian Embassy / Consulate. Please refer to the new KRA Norms. - I am a Non Resident Indian (NRI). How do I apply for a PAN?
You may apply for a PAN online with the Income Tax website (please refer to point number 5 above for details). - Would my application be rejected if I mention my PAN number in my application form but inadvertently miss out on attaching a copy of the PAN card?
Yes. Both the application form and copy of PAN, duly verified, are a must for the processing of any application. Applications without PAN details and a copy of the PAN card will be deemed incomplete. - I invest through my Agent / Distributor who submits my application form at the Mutual Fund office. How am I supposed to get my PAN verified?
In such a case, your Agent / Distributor must verify your PAN with the original PAN card and then submit it to the agency. PAN verified by an Agent / Distributor shall be accepted provided the Agent / Distributor affixes his ARN seal along with his signature and name on the PAN card copy with the words "Verified with the original PAN Card". The Agent / Distributor should be the same as the one on the investment application form. - Can I get my PAN verified by any other entity?
You may submit PAN attested by the Notary Public, Gazetted Officer, Manager of a Scheduled Commercial Bank, or by the Indian Embassy / Consulate. Name, Designation, and Seal along with the signature should be affixed on the copy with the words "Verified with the original PAN Card" - The joint holder of my folio is not assessed to tax and hence, does not have a PAN. How do I invest in Mutual Fund units in such a case?
All applicants / joint holders of Mutual Fund units need to have a valid PAN. - What if my PAN verification fails? Will the units allotted to me be forfeited?
For the cases wherein the PAN verification fails, the investors would be contacted. If failed to get the same regularized, the investment amount is liable to get redeemed/refunded, and the folio is liable to be locked for further transactions. - I hold multiple folios but my PAN is verified in one of the folios. Does it get verified for the other folios automatically?
No. You must intimate to SEBI in writing, signed by all Unitholder(s) as per the mode of holding, mentioning your folio number(s) on a separate sheet to enable you to update your record. You must ensure that all unitholders (i.e., first and all joint holders) have the PAN verified too.
However, we strongly recommend, that you consolidate all folios (certain conditions apply) for your own convenience. - My account statement shows PAN details and verification status as "Yes". Do I need to submit any other documents?
Since this is a new requirement, please ensure that you give a copy of PAN card duly verified. If you have done so and have an acknowledgment from the registrar, you need not take any action.
Mutual Funds are required to counter-verify the details from the Income Tax website or the CAMS website. Your PAN card copy, duly verified will help in case of any discrepancy. - My account statement shows PAN details and verification status as "No". Do I need to submit my PAN proof?
Yes, you must get your PAN details verified with SEBI immediately, to be able to carry out transactions. - Is there any way I can ascertain if my PAN details with you are validated?
Yes. We recommend that you visit the website of SEBI’s Registrar & Transfer Agent (RTA), Computer Age Management Services Pvt. Limited (CAMS), the link for which is www.camsonline.com
You may enter your PAN on the site, wherein, the link is provided to enable you to ascertain the status.
If your PAN is verified, please send a list of all your folios quoting the verification status on this website.
This applies to all unitholders of the folio. - If I/we do not have a copy of the PAN card but have an intimation of my / our PAN card from the Income Tax authorities, will it suffice?
No. As per SEBI circulars, it’s required to verify the original PAN card.
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Finance guru Speaks