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Will Submitting Of Aadhar Card For Traders Help Curb Illicit Practices?


As per a notification dated June 1, 2017, the Prevention of Money Laundering (Maintenance of Records) Rules, 2005, has been amended and it now makes mandatory for all trading account holders to furnish their Aadhaar by December 31, 2017. In case the mandate is not complied with within the stipulated timeframe, the account shall cease to be operational until the time the client submits the Aadhaar ID.

Will Submitting Of Aadhar Card For Traders Help Curb Illicit Practices?

The linking of Aadhaar and PAN deadline has yet again been extended providing relief to several individuals who do not hold Aadhaar currently. The linkage has made multiple or duplicate PAN cards in the system redundant as it's not possible to hold multiple Aadhaar IDs by one person due to biometric verification.

Here are some of the ways in which furnishing of Aadhaar IDs by traders would help:

1. Stop laundering Activities: In case the trading account holder fails to produce Aadhaar number for the account for which he has his PAN number registered, the account will be made inoperational. This said, multiple PAN may not be used in the capital market dealings.

Money shall not be able to escape the taxation implication and due taxes will have to be cleared.

2. Credibility establishment: As soon as the PAN of a trader is registered with the trading account, the details of his PAN are established. In case of long term capital gains from shares which are exempt from income tax net, a double check shall ensure that the system is not used wrongly by unscrupulous people. And any mismatch in trading account with Aadhaar card shall be verified by the government and would aid in tracing benami accounts.

3. Mutual fund investors too need to provide their Aadhaar numbers:

The mutual fund investors also have to provide their Aadhaar numbers by December 31, 2017 to their fund houses and this would enable them to continue with their investments without any restrain.

Story first published: Thursday, September 7, 2017, 12:07 [IST]
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