Tuesday, July 27, 2021
Home Business Mutual Fund Investors Beware! You can't redeem your MF units if PAN...

Mutual Fund Investors Beware! You can’t redeem your MF units if PAN becomes invalid


No investments by new investors in any MF schemes or by existing investors in other MF schemes will be possible unless the investors have a valid PAN card.

Mutual Fund (MF) investors will not only face trouble while making any investment, but also won’t be able to take out their own investment money, if their Permanent Account Number (PAN) becomes invalid after June 30, 2021. This is because, as per the recent regulatory guidelines, PAN-Aadhaar linking will become mandatory for any MF transactions with effect from July 1, 2021.

In fact, in a recent exercise carried out with NSDL to identify PANs linked with Aadhaar, Registrar and Transfer Agent (RTA) Computer Age Management Services (CAMS) has already found that some of the PANs furnished by MF investors are invalid as per IT database.

As per SEBI guidelines, for the following transactions, the PAN status of investors should be ‘valid’:

Fresh Purchase

No investments by new investors in any MF schemes or by existing investors in other MF schemes will be possible unless the investors have a valid PAN card.

Additional Purchase

If the PAN becomes invalid, the existing investors will not be able to top up even their existing MF folios through additional purchases.

SIP

The regular investments by the existing investors through Systematic Investment Plan (SIP) will also stop in case the PAN of the investors becomes invalid due to not linking it to their Aadhaar.

STP

Not only fresh and regular investments, but the investments through Systematic Transfer Plan (STP) from one MF scheme to another scheme will also be stopped if PAN becomes invalid.

Redemption

In case the PAN becomes invalid, MF investors can’t even access their own money invested in MF schemes as redemption requests will also be rejected.

SWP

An invalid PAN may also derail the monthly budget of an investor as the redemption through Systematic Withdrawal Plan (SWP) will also stop.

Beware! You may face higher TDS, disruption in banking services from July 1 if you fail to do this

Hence, in case, PAN is returned ‘invalid’ by NSDL, investors may face inconvenience in transacting, because from July 1, 2021 for any MF transaction (Fresh Purchase, Additional Purchases, SIP / SWP / STP, Redemption etc), PAN status of investors should be ‘valid’.

How to solve the problem

In case there is any change in PAN that causes problems in linking it with Aadhaar, existing investors may request the respective AMCs or RTAs for updation of correct PAN.

However, if the given PAN is correct, investors need to take it up first with the Income Tax authorities for making correction in PAN status and – once the correction is made – inform the AMCs/RTAs for making further validations.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.





Source link

RELATED ARTICLES

Master These Rummy Strategies to Skill up The Game Today

Rummy, the most revered card game in the world after Poker, is a show of sharp mind and swift move. The idea of the...

Tesla (TSLA) earnings Q2 2021

Tesla reported earnings after the bell Monday, and it's a beat on both top and bottom lines. Shares rose about 1% after hours. Here...

9 Myths Behind Brain Tumor Surgery

Brain tumors can happen to people of any age group. Moreover, brain tumor surgery varies from person to person depending on the size and...

LEAVE A REPLY

Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Master These Rummy Strategies to Skill up The Game Today

Rummy, the most revered card game in the world after Poker, is a show of sharp mind and swift move. The idea of the...

Tesla (TSLA) earnings Q2 2021

Tesla reported earnings after the bell Monday, and it's a beat on both top and bottom lines. Shares rose about 1% after hours. Here...

9 Myths Behind Brain Tumor Surgery

Brain tumors can happen to people of any age group. Moreover, brain tumor surgery varies from person to person depending on the size and...

Lok Sabha passes Factoring Regulation (Amendment) Bill; to help expedite MSME payments

Over 83k delayed payment applications have been filed by micro and small enterprises, as of July 26, 2021, as per MSME Samadhaan portal.Credit...

Recent Comments