Aadhaar linkage to demat KYC: Finish these compliance tasks before Dec 31

Failure to do so could result in penalties or lead to hassles later in financial planning

The last day of this calendar year - December 31 - is the deadline for completing a number of important financial tasks. If you leave them unfinished or push them to 2022, you may have to pay penalties and there could also be other repercussions on your finances.

Submission of life certificate

The deadline for pensioners to submit their life certificates was extended from November 30 to December 31. Life certificate, also known as Jeevan Pramaan, is an important document, especially for government retirees, which has to be presented annually to the authorised payees.

It provides verification that the pensioner is still alive. Only then does a retiree continue to receive pension. This document acts as proof that the retiree is alive and should continue to receive pension.

Naval Goel, founder and chief executive officer, PolicyX.com, says, “Pensioners who can’t visit the bank or post office can adopt digital modes to submit their life certificates. One option is to submit it on the Jeevan Pramaan website. Or they could download the mobile application and connect to the Unique Identification Authority of India-mandated device to submit their fingerprints.”

If they find this difficult, then home service is also available. The authorised government bank and post office branches also provide doorstep service. A bank agent will visit the pensioner’s home to collect the certificate at a convenient time.

If a pensioner fails to meet this deadline, the monthly disbursement of her pension will be discontinued.

KYC of demat and trading account

The deadline for making demat and trading accounts know-your-customer (KYC)-compliant was extended by the Securities and Exchange Board of India from September 30 to December 31. Name, address, permanent account number, valid mobile number, valid email ID, and income range are six KYC attributes that must be mandatorily provided by new account holders who opened their accounts on or after August 1.

M Barve, founder, MB Wealth Financial Solutions, says, “You need to verify mobile number, email ID for KYC compliance. Until then, the demat account will remain under ‘Pending for Activation’. Such a demat account could also be closed.”

EPFO nominations and Aadhaar linkage

The Employees’ Provident Fund Organisation (EPFO) has made it essential for all provident fund (PF) account holders to designate a nominee. The deadline for this is also December 31. Failure to add a nominee to your PF account by this date can result in a variety of problems, including loss of benefits, such as insurance money and pension

The EPFO has also made it mandatory to link Aadhaar number with the EPF account. The deadline for completing this important task is also December 31.

Failure to link the EPF account and Aadhaar number by December 31 will lead to discontinuation of employer’s contribution to the employee’s PF account. The PF regulator has also directed employers to get the Universal Account Number (UAN) of all EPF account holders Aadhaar-verified.

The December 31 deadline is for establishments in the Northeast and for certain classes of establishments.

Prashant Singh, business head-compliance and payroll outsourcing, TeamLease Services, says, “Without the seeding of Aadhaar, the EPFO portal may not allow the employer to remit the employee and employer contribution. This could happen even in the case of employees who have been contributing for a long time. Employees unable to rectify their Aadhaar data to match the EPFO data may face trouble in contributing to EPF and in withdrawal as well.”

Individual employees need to log into the member portal using UAN and password. After logging in, select ‘e-KYC’, then select ‘Seeding Aadhaar’. A one-time password will be delivered to the employee’s Aadhaar-registered mobile number for authentication. The employer also needs to confirm this by giving his approval.

“The EPFO does not hold any alternative document other than Aadhaar. In many cases, the Aadhaar data does not match with the employee’s data, including information like name, father’s name, date of birth, and so on. The EPFO could simplify the process of change of data by way of employer approval online on Aadhaar mismatch with the EPFO employee data. Or the EPFO could notify some alternative documents in place of Aadhaar, like passport. Right now, make sure you do the needful to avoid issues later,” says Singh.

Finally, the last date for filing income-tax return for the assessment year 2021-22 is December 31. Taxpayers who fail to meet this deadline will have to pay a penalty of up to Rs 5,000.

How to file e-nomination for your PF account

• Visit epfindiagov.in, the official website of the EPFO

• Under ‘Services’, select ‘For Employees’ from the drop-down menu

• Now, select the ‘Member UAN/Online Service (OCS/OTCP)’ option

• Log into the website using your UAN and password

• Click on the e-nomination option under the ‘Manage’ page and activate it

• To change your family or nominee details, click ‘yes’. Submit all the information on the nominee that is requested

• If you wish to make multiple nominations, click on the ‘Add New’ option and provide information about the additional nominee

• Once you save all this information, e-nomination will be filed for your PF account