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Aadhaar e-KYC holders struggle with last minute investments in ELSS mutual funds

Many Aadhaar-based e-KYC holders are struggling to invest in ELSS funds as part of their last minute tax planning exercise this financial year.

, ET Online|
Mar 13, 2019, 03.34 PM IST
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Many Aadhaar-based e-KYC holders are struggling to invest in Equity Linked Saving Schemes or tax-saving schemes as part of their last minute tax planning exercise this financial year. The mutual fund houses are rejecting their investments of over Rs 50,000 as Aadhaar-based e-KYC holders cannot invest more than Rs 50,000 in a financial year.

A reader of shared her experience with us recently. She invested Rs 1.5 lakh directly in an ELSS scheme. The next day she got a message that her investment could not be processed and the money is credited back to her bank account.

Mutual fund advisors say the situation is because of the ban on Aadhaar-seeded e-KYC. The Supreme Court asked private entities to stop insisting on Aadhaar details from customers in October 2018. If an investor wants to invest more than Rs 50,000 in a mutual fund scheme in a financial year, she must complete KYC procedure, say advisors.

Mutual fund advisors say many mutual fund investors are a bit clueless how to proceed further and complete their tax-saving investments in a few days.

“Mutual funds require in-person verification which was cut down when Aadhaar was accepted. However, investors can still do the online KYC. The IPV can now be done through a video call,” says Jitendra Solanki, founder, JS Financial Advisors.

“Most online portals allow you to do KYC online through a normal video call or via watsapp video call,” says Sharad Singh, founder, CEO, Invezta, an online platform to invest in direct mutual funds.

Singh explains the procedure: all you require is to download the form, fill it, get together the required documents, upload them and make a video call to the distributor. The video call helps the distributor to verify the person and the original documents, he adds.

“Once the IPV is done, it takes a few hours before you can actually start investing," says Shrarad Singh. The biggest joy of e-KYC through video call is there is no limit of Rs 50,000 on investment during a year, he adds.

IPV can be carried out by mutual funds, too, but most AMCs are currently not allowing E-KYC, say mutual fund advisors. Quantum Mutual Fund is an exception, they say.

If any direct investor is not comfortable with the online IPV process, s/he can go through the traditional path. Download the form, fill it and submit it to any AMC’s office or registrars’ office with the required documents, and you are ready to invest any amount you want in mutual funds.

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eKYC, Digital KYC for opening bank accounts to make process secure: UIDAI

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