PAN Mandatory For Mutual Fund Investments
If you have invested in mutual funds, then you must know about the importance of PAN for mutual fund investments. The association of the Mutual Fund of India has made PAN mandatory for all mutual fund transactions. Note that it also mandates for the redemption of MF investments. Investors who want to invest in MF schemes will update their Permanent Account Number (PAN) details in their mutual fund portfolio.
Mutual fund investors will have to update their KYC details along with PAN to redeem their investments from MF.
The decision was taken after a recent inspection by the Securities and Exchange Board of India (SEBI). In which it was noticed that some mutual funds and registrar & transfer agents (RTA) had processed redemption requests without taking the PAN details.
PAN is not mandatory for investors who invest up to 50,000 per year per Mutual Funda. These types of investors should not be required to provide their PAN details. They can only provide other approved identity instead of Pan.
How To Update PAN Details
According to the reports, investors who claimed to update their Pan details can do updated either on an Online website or manually submit PAN/KYC details update form along with updated PAN copy to the mutual fund office. Investors have another way to update their PAN and KYC details by using the PAN/KYC change request form. They can submit this form to KYC Registration Agency (KRA). Cams Investor Services Ltd and Karvy Data Management Services Ltd.
Once KRA updates the details of PAN/KYC, RTA will renew the details across all MF in which the investor holds investments.
A source said that the PAN is necessary for redemption or repurchase transactions. AMCs and RTAs will require to collect PAN details of unitholders at the time of redemption who has not been providing PAN details previously. Investors’ financial and redemption transactions will get reject until they update the PAN details.