PAN may be canned for small investors

18 June 2009

Small investors in mutual funds may soon be relieved of the cumbersome process of providing their PAN or permanent account number every time they make a deposit. The government has given in principle approval to this proposal.

The exemption will only apply to an annual investment of up to Rs50,000 in MF units.

Moreover, only investments through monthly systematic investment plans (SIPs) will be exempt from the provision.

Announcing this on the sidelines of a CII conference in New Delhi, Association of Mutual Funds in India (AMFI) chairman A P Kurian said, ''We are waiting for the official notification from the government but the proposal has been approved.''

In 2007, market regulator Securities and Exchange Board of India had made it compulsory for all resident and non-resident Indians to submit a copy of their PAN cards while investing in securities.

The AMFI has been lobbying against the move for quite some time, specially in the face of dwindling MF investments. ''It is a good thing - it will let the industry grow. There is a strong need to harmonise statutory and regulatory norms for the mutual fund industry,'' Kurian said.