Permanent account number (PAN) and Aadhaar have become mandatory for investing in small savings schemes.
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Permanent account number (PAN) and Aadhaar have become mandatory for investing in small savings schemes such as Sukanya Samriddhi Yojana (SSY), Public Provident Fund (PPF), and Senior Citizens Saving Schemes (SCSS) from April 1, 2023 onwards. The Finance Ministry announced the same via an official notification on March 31. According to the government’s notification, PAN and Aadhaar numbers must be submitted when subscribing to any government-backed small saving schemes. Existing subscribers will have to submit their Aadhaar number by September 30, and if they fail to comply, their accounts will be frozen till the time they submit the Aadhaar number. Furthermore, the notification has made it clear that if you wish to open PPF, SSY, NSC (National Savings Certificate), SCSS or any other small savings account without Aadhaar, then you will have to furnish an Aadhaar number within six months of account opening to link it with the small savings scheme investment.
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It is worth noting that if UIDAI hasn’t assigned you the Aadhaar card, then you can provide your Aadhaar enrolment number.
Prior to this notification, investment in government-backed small saving schemes was possible without the submission of Aadhaar number. But, from now onwards, subscribers will have to submit at least their Aadhaar enrolment number for making investments in such saving schemes.
These changes are part of the know-your-customer (KYC) process.
The notification further says that PAN has to be submitted at the time of small savings account opening. If the PAN is not submitted at the time of account opening, it must be submitted within two months of account opening in following cases:
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- The balance at any point of time in the account exceeds Rs 50,000
- The aggregate of all credits in the account in any financial year exceeds Rs 1,00,000
- The aggregate of all withdrawals and transfers in a month from the account exceeds Rs 10,000.
“In the event of failure of the depositor to submit the Permanent Account Number (PAN) within the specified period of two months, his account shall cease to be operational till the time he submits the Permanent Account Number to the Accounts Office,” read the notification.
Small saving schemes like Public Provident Fund (PPF) and Senior Citizens Saving Schemes (SCSS) are preferred by millions of middle-income individuals over other investment options.
These schemes are government-backed and provide guaranteed returns. Besides,these schemes also offer tax benefits under Section 80C of the Income Tax Act.
