Investors who want to continue trading in the capital markets in a seamless and unrestricted manner will have to link their Permanent Account Number (PAN) with Aadhaar by March 31.
This assumes significance as PAN is the key identification number for all stock market transactions and is an integral part of all Know Your Client (KYC) requirements.
In a release issued on Wednesday, the capital market regulator said that the move is in line with the provisions of the Income Tax Act.
“The provisions of Income-tax Act, 1961, make it mandatory for every person who has been allotted a Permanent Account Number (PAN) to intimate his/her Aadhaar Number to the prescribed authority so that the Aadhaar and PAN can be linked. This is required to be done on or before the notified date, failing which the PAN shall become inoperative,” stated the Sebi release.
“Since PAN is the key identification number and part of KYC requirements for all transactions in the securities market, all SEBI registered entities and Market Infrastructure Institutions (MIIs) are required to ensure valid KYC for all participants,” it added.
More importantly, it said that “all existing investors are required to ensure linking of their PAN with Aadhaar number prior to March 31, 2023, for continual and smooth transactions in securities market and to avoid consequences of non-compliance with the said CBDT circular, as such accounts would be considered non-KYC compliant, and there could be restrictions on securities and other transactions until the PAN and Aadhaar are linked”.
The regulator highlighted the fact that as per a circular issued by the Central Board of Direct Taxes (CBDT) in March 2022, the PAN allotted to a person will become inoperative if it is not linked with Aadhaar by March 31, 2023 and shall be liable to all the consequences under the Income-tax Act, 1961 for not furnishing, intimating or quoting the PAN.
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