Mutual Funds

Change in tax status? Register it!

| Updated on March 10, 2018

Have you, an NRI, decided to become an Indian resident? Or has your minor daughter attained the age of 18? Any such change in status would have to be updated at the KYC Registration Agency (KRA) as well as in your mutual fund folios.

Forms from KRA

Forms are available for updation of personal particulars at the Web sites of the KYC Registration Agencies. The section “New Status” should be filled in and submitted to the intermediary — Mutual Fund (or their Registrars)/Depository Participant. If the nationality of the applicant has changed, it should be indicated in the field “Nationality”. The supporting documents required — including proof of overseas address in cases of change to NRI and proof of local address in case of change to Resident — are mentioned in the form. Investors may submit the same to the intermediary.

If this is done, the change in address will be automatically changed in the records of the mutual funds in all folios across all funds where the KYC Status has been updated.

Informing the fund

Tax status and contact details such as telephone numbers and email ID will have to be communicated separately to the respective mutual funds/registrars for updation in their records.

Bank details of investors who change their status from Resident to Non-resident would have to be updated to NRO. Similarly, for those whose status has changed to Resident, the Savings account details would have to be updated in the folio. The complete bank details should be furnished in the request letter and the copy of cancelled cheque with the investor name pre-printed therein of the new bank is to be enclosed. Investors may check for details of any additional proof documentation or requirement with the mutual fund.

An investor’s current tax status as Resident or NRI is required to be correctly updated for the processing of redemptions and application of TDS.

from Minor to Major

When the units are held on behalf of the minor, a guardian can operate the account until the minor attains the age of majority. Prior to the minor attaining the age of majority, mutual funds send advance notice to the registered correspondence address advising the guardian and minor to submit an application form along with the prescribed documents to change the status of the account to “major”. At the time of changing the status to major, bank details of the major, along with the applicable documentary proof, should be submitted.

KYC Compliance at the KRA

An investor who has turned major should complete the KYC formalities and submit the KYC application form to the mutual fund (or their registrars) to be KYC compliant. Only then will the status from minor to resident individual be updated by the mutual fund.

In addition, the following are required to be submitted to the mutual fund:

A Service Request form (available at mutual fund/registrar Web sites) duly filled and containing details such as Fund, name of the investor, folio number

Age Proof — Birth certificate/PAN Card copy /driving licence

Bank particulars with the relevant proof attached — cancelled cheque with the name and account number printed therein/or a copy of the bank statement showing the name of the investor and account number duly attested by the bank manager

Signature attestation of the investor (major) by the bank manager and guardian

On receipt of the documents, the change in status will be effected and the investor can transact freely.

Contributed by CAMS Viveka, an Investor Education Initiative from CAMS. Views expressed are general practices in the MF industry and may vary on a case-to-case basis.

Published on April 04, 2013

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