After several previous deadline extensions, the last deadline to link your Aadhaar with your PAN card lapsed on June 30, 2023. Effective July 1, 2023, the PAN of individuals who have not linked it with their Aadhar has been rendered inoperative.
This could significantly impact your mutual fund investments, affecting not only the buying and selling of funds but also your SIPs (including the ongoing ones) or even updating your address, etc.
In fact, confidential sources from a prominent fund house have reported a substantial increase in customer complaints, with a surge of 60-70 per cent largely attributed to the freezing of their folios due to their failure to link their Aadhaar with PAN card.
How to reactivate your PAN for investments
Fortunately, there is a solution even after the deadline has passed. You can still link your Aadhaar with your PAN and reactivate your PAN for investment purposes. However, please be aware that there is a penalty fee of Rs 1,000 associated with this process.
Here are the steps to follow:
- Navigate to the Income Tax India e-Filing portal.
- Enter your PAN and Aadhaar numbers and click 'Validate.'
- As the deadline has expired, a fee of Rs 1,000 is applicable. Click on 'Continue to Pay Through e-Pay Tax.'
- You will be redirected to the e-Pay Tax page. Here, enter your PAN and mobile number to receive an OTP.
- After OTP verification, click 'Proceed' on the Income Tax tile.
- Choose the Assessment Year as '2024-25' and the Type of Payment as 'Other Receipts (500).' Under 'Sub-type of Payment,' select 'Fee for delay in linking PAN with Aadhaar.'
- The applicable fee will be pre-filled in the 'Others' section. Click 'Continue.'
- Select your preferred payment method and complete the transaction.
- After paying the fee, return to the e-Filing Portal to link your Aadhaar with PAN.
- Repeat steps 1 and 2. Now, you'll be prompted to enter your name and phone number. An OTP will be sent to validate your information.
- Upon successful validation, you will receive a notification stating that your request is under review and will be validated within 48 hours.
Once this process is complete, your PAN card should be reactivated and ready for use in your investments.
Things to note
- Every holder in a joint mutual fund investment is required to link their Aadhaar with their PAN, regardless of whether they are the primary or secondary investor. Until this process is completed for all, the investment folio will remain frozen, thereby preventing any financial transactions or modifications.
- The following categories of individuals are exempt from this mandate:
- Individuals aged 80 and above.
- Non-citizens of India.
- Non-Resident Indians (NRIs).
- Residents of Assam, Meghalaya, or Jammu & Kashmir.
However, it is important to note that NRIs are only exempted if their NRI status is officially recorded with the Income Tax Department. Often, individuals who were initially classified as 'residents' in India may leave the country and attain NRI status but neglect to update this change in status with the Income Tax Department. Until the department's records are updated to reflect your NRI status, you are not exempt from linking your Aadhaar and PAN, and you will continue to be subject to the same restrictions as non-exempt individuals.
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