New Delhi: If you are a mutual fund investor, your folio is almost certainly linked to your Permanent Account Number (PAN). After March 31, 2023, you will not be able to invest new funds (lump sum or SIP) into your account without linking your tax office ID. Your folio must be linked to your PAN to be able to create and repay investments in the next fiscal year. The investors who have not yet updated their PAN on their folio should do so as soon as possible. This deadline is March 31, 2023.
Mutual fund investors must know that non-PAN slides will be frozen the day after the deadline if these details are not updated. Not only will these accounts be frozen, but any additional profits such as dividends declared by the fund company will also be denied to these accounts.
The Association of Mutual Funds in India (AMFI) stated in its notification, “No investments (systematic or lumpsum) shall be permitted in such folios wherein PAN or PAN exempt KYC reference number (PEKRN) is not available. Dividend pay-out by MF schemes to such folios shall also be disallowed.”
Additionally, shareholders whose accounts have been frozen due to unlinked PAN will not be able to access the service until such details are provided. The user must also provide this data when filing a complaint. The PAN-exempt users must update their PEKRN (PAN Exempt KYC Reference Number). All other conditions apply equally to PAN-exempt users.
You must realize that the redemption of mutual fund accounts not linked to PAN is already prohibited. This has been in effect since September 2019 after market regulator SEBI raised concerns about large withdrawals from these accounts. Apart, most mutual fund slides not linked to a PAN account were opened prior to January 1, 2011, as PAN became mandatory for mutual fund investments after January 1, 2011.