If you invest money in mutual funds, then this news is very important for you to know. Actually from June 30, a very important rule is going to change. Under this rule, those who do not link PAN and Aadhaar card by June 30, their PAN card will become invalid, which will directly affect your investment in mutual funds. Let us tell you that about 20-30 lakhs of people investing in Mutual Funds (MFs) have not linked their PAN with Aadhaar.
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Those who will not be able to link PAN with Aadhaar by June 30 are fined Rs 10,000 under the Income Tax Act. The bigger problem would be that your PAN would automatically become invalid or inoperative.
Mutual fund investment is not possible with invalid PAN
To invest in mutual funds, you have to go through two documentation process. Under the first process, it is necessary to do Know Your Customer or KYC. On the other hand, for the second process, it is necessary for the customer to have a valid PAN. If your PAN becomes invalid due to non-linking of Aadhaar, you will not be able to invest in mutual funds.
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30% PAN card in MF not linked with Aadhar
According to mutual fund transfer agency Computer Age Management Services (CAMS), there are around 20 lakh PAN numbers which are still not linked with Aadhaar. That is, about 30% of PAN cards are not linked with Aadhaar. As per Income Tax rules, it is mandatory to link Aadhaar with your PAN on or before June 30, 2021. If PAN is not linked with Aadhaar, PAN will be treated as inoperative. With this, KYC of mutual funds will also become useless.
SIP will stop
So if you do not link your PAN with Aadhaar, you will not be able to make any fresh investments in mutual funds. Nor will you be able to take mutual fund money. As per SEBI regulation, funds will be released only when KYC and PAN are valid.