According to the guidelines of the government Adhar-PAN linking will be compulsory for any Mutual Funds transactions, by 1st July 2021.The mutual fund investors will not be able to make any transactions and also cannot redeem their invested money if their PAN (Permanent Account Number) is invalid by 30th June 2021.
According to the SEBI (Securities Exchange Board India) the PAN status should be valid to carry out the following transactions.
New Investments
The new investors or existing investors in new MF policy can only invest in the new MF policies if they have a valid PAN card. Investors with invalid PAN card wouldn’t be able to make fresh investments.
Additional Purchase
The existing investors wouldn’t be able to make any additional purchases if their PAN card is invalid.
SIP (Systematic Investment Plan)
If PAN card of the investor is invalid then the investor wouldn’t be able to make periodic investments made in the SIP’s.
STP (Systematic Transfer Plan)
The investors with invalid PAN will not be able to invest through STP from one MF policy to other MF Policy.
Redemption
Investors with invalid PAN card would not be able to redeem their existing investments in the MF schemes.
SWP (Systematic Withdrawal Plans)
Investors will not be able to withdraw money through SWP if their PAN card is invalid.
So, if the PAN is evaluated invalid by NSDL (National Securities Depository Limited) the transactions of the above-mentioned MF schemes will be stopped by 1st July 2021.
Hence, the existing investors need to link their PAN card with Adhaar card. If they are facing issues while linking Adhaar and PAN card they can approach Registrar and Transfer Agent (RTA) Computer Age Management Services (CAMS) for validation of PAN card.
If the PAN card is correct the investors should approach the Income Tax Department to make rectifications in the PAN card and then take it to RTAs for validation of PAN card.
These steps were carried out by the SEBI because in a fresh investigation with NSDL to rectify PAN card linked with Aadhaar card, Registrar and Transfer Agent (RTA) Computer Age Management Services (CAMS) concluded that a few of the PAN cards used by MF investors were invalid according to the Income Tax database.
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