For continued and trouble-free transactions in the securities market, the Securities and Exchange Board of India (Sebi), which regulates the capital markets, has asked all investors to link their PAN with their Aadhaar number by March 31.
Sebi stated in a statement that non-compliance with this would be considered non-KYC compliant, and securities and other transactions may be restricted until the Permanent Account Number (PAN) and Aadhaar are linked.
In March 2022, the Central Board of Direct Taxes (CBDT) issued a circular stating that a person’s PAN will be ineffective if it is not linked to Aadhaar by March 31, 2023, and they will be subject to all of the penalties outlined in the Income Tax Act of 1961 for failing to provide, notify, or quote the PAN.
“All Sebi registered entities and Market Infrastructure Institutions (MIIs) are required to ensure valid KYC for all participants,” it stated. “Since PAN is the key identification number and part of KYC requirements for all transactions in the securities market,” it continued.
Sebi stated, “All existing investors are required to ensure linking of their PAN with Aadhaar number prior to March 31, 2023, for continued and smooth securities market transactions and to avoid consequences of non-compliance with the said CBDT circular.”
To ensure that the PAN and Aadhaar can be linked, the Income Tax Act makes it a requirement for anyone with a PAN to inform the appropriate authority of their Aadhaar number.
The PAN would cease to be valid if this wasn’t completed by the deadline that was given.
