With effect from July 1, 2021, PAN-Aadhaar linking would be required for all MF transactions, according to the rules issued by the Income Tax Department. If a mutual fund investor will not link his or her PAN with Aadhaar before June 30, 2021, then he or she would not only have difficulty making subsequent or fresh investments but will also be unable to withdraw their funds due to the resulting of an invalid PAN. Here is a list of mutual fund transactions that will not be authorized from July if a mutual fund investor does not link PAN with Aadhaar on or before the deadline of June 30, 2021.
- New investors having invalid PAN would not be allowed to make an initial contribution to any mutual fund schemes.
- Existing investors having invalid PAN would not be able to make subsequent contributions to any ongoing or new mutual fund schemes. Even existing investors or subscribers would not be able to make additional purchases for their mutual fund portfolios.
- Having an invalid PAN due to non-linking of it with Aadhaar will also create trouble for existing investors as they would not be able to make subsequent or fresh Systematic Investment Plan (SIP) to any mutual fund schemes.
- In case of an invalid PAN, even investments made through the Systematic Transfer Plan (STP) from one MF plan to another would be halted.
- Existing and new mutual fund investors would be unable to withdraw their funds invested in any MF schemes if their PAN becomes invalid, since redemption claims will be declined.
- The Systematic Withdrawal Plan (SWP) would also be halted, resulting in an invalid PAN. Which may cause you to unmeet your immediate financial needs.
To summarise, investors could experience difficulties beginning July 1, 2021 for every MF transaction, including new purchases, subsequent purchases, SIP, SWP, STP, redemption, and so on. If there is a discrepancy in PAN or Aadhaar that prevents the two from being linked, mutual fund investors should update their PAN or Aadhaar data as soon as possible and link their PAN with Aadhaar to become a mutual fund investor with a valid PAN starting from July 1, 2021.
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Story first published: Wednesday, June 23, 2021, 16:32 [IST]