PAN is Mandatory for KYC Compliance

I am continuously investing in different mutual fund houses through SIPs. I have nominated my wife for all funds that I own. My financial advisor advised me that a PAN card was necessary for my wife to claim the amount in future. Is this true? Please reply.
- Sridharan K

It would be prudent for your wife to get a PAN card.

In case of death of a unitholder owning a scheme, the AMC would require following documents for transmission of units to nominee's name.

• Letter from claimant nominee/s to the Mutual Fund requesting for transmission of units
• Death Certificate in original or photocopy duly notarized or attested by gazette officer or a bank manager
• Bank Account Details of the new first unit holder as per specified format along with attestation by a bank branch manager or cancelled cheque or bank statement bearing the account details and account holders name
• KYC of the claimant
• Indemnity signed and executed by the nominee(s) in the specified format, if the transmission amount is equal to or more than the Threshold Limit as determined by the AMC / Mutual Fund. (Currently the "Threshold Limit" is ₹5 lakh per investor)

A PAN card is mandatory to apply for the above KYC except in the following cases:

• In case of transactions undertaken on behalf of Central Government, State Government and officials appointed by Courts e.g. Official liquidator, Court receiver.
• Investors residing in the state of Sikkim.
• UN entities/multilateral agencies exempt from paying taxes/filing tax returns in India.
• Systematic Investment Plan (SIP), where aggregate of installments in a rolling 12 month period or in a financial year i.e. April to March does not exceed ₹50,000.

This article was originally published on December 09, 2014.