PAN and Aadhaar numbers are now required for investing in small savings schemes such as Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Post Office Saving Scheme, Senior Citizens Saving Scheme (SCSS), and others. On March 31, 2023, the Ministry of Finance issued a notification in this regard.
These modifications were made as part of the KYC (Know Your Customer) process for small savings schemes. Prior to the central government’s notification, it was possible to invest in small savings schemes without submitting one’s Aadhaar number.
However, in order to invest in government-backed small savings schemes, one must now provide at least an Aadhaar enrolment number. The notification also stated that anyone investing over a certain amount will be required to provide a PAN card.
New rule for small saving scheme
According to the Finance Ministry’s notification, small savings subscribers must submit their Aadhaar number by September 30, 2023, if they did not submit their Aadhaar number when opening a PPF, SSY, NSC, SCSS, or any other small savings account.
The notification also stated that new subscribers who wish to open any of the small savings schemes without an Aadhaar number must provide an Aadhaar number within six months of account opening. If a small saving scheme subscriber has not yet received his Aadhaar number from the UIDAI, his Aadhaar enrolment number will work.
If an Aadhaar number or Aadhaar enrolment number is not seeded, a small savings account will be frozen six months after the account is opened. Existing subscribers’ accounts will be frozen on October 1, 2023, if they do not provide their Aadhaar number with their small savings account by the deadline.
The notification went on to say that PAN must be submitted when opening a small savings account. If the PAN is not submitted at the time of account opening, it must be submitted within two months in the following circumstances:
1] The balance at any point of time in the account exceeds fifty thousand rupees; or
2] The aggregate of all credits in the account in any financial year exceeds one lakh rupees;
3] The aggregate of all withdrawals and transfers in a month from the account exceeds ten thousand rupees.
“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,” the notification added.