The Securities and Exchange Board of India (SEBI), in coordination with the Income Tax Department, has made it mandatory for investors to link their PAN (Permanent Account Number) for all high-value mutual fund investments. This move is aimed at strengthening KYC compliance, preventing money laundering, and ensuring robust verification of investor identity in large financial transactions. The decision aligns with the government’s broader efforts to make PAN the universal identifier for all capital market-related activities.

As per the latest directive, mutual fund investments exceeding ₹50,000 per transaction or held cumulatively over time must be backed by a valid and Aadhaar-linked PAN. Fund houses and distributors have been instructed to verify PAN status before processing such transactions. If the PAN is found to be inactive, incorrect, or unlinked with Aadhaar, the transaction will be rejected or held until the investor rectifies the discrepancy. This rule applies to both new and existing investors across SIPs, lump-sum purchases, and systematic transfer plans.

Industry participants have been urged to communicate the changes proactively and assist investors in updating their KYC records through official portals and service centers. Investors are also advised to regularly verify their PAN-Aadhaar linkage status and correct any mismatches in personal details that may affect compliance. The new norms will come into effect from July 1, 2025, and non-compliance could lead to the freezing of mutual fund accounts or the disallowance of transactions involving large corpus movements.