Money
How CAMS/KFIN can help manage your family's MF portfolios
Summary
- Self-declaration form allows family members to transact with a single phone number, email id
Financial planning is gaining credence the world over, especially since people want to make their aspirations come true. Over the years, people have turned to investing in mutual funds, rather than traditional savings schemes, to meet their financial goals, be it for education, marriage or retirement. They are also encouraging other family members to do so. But managing multiple phone numbers, bank accounts and email IDs associated with such investment portfolios is no easy task, especially where it concerns investments that help you meet financial goals. And it gets all the more difficult when you are planning for the entire family.
For most people, managing multiple PANs (Permanent Account Numbers, issued by the income tax department) of family members for making investments in mutual fund accounts can often be a cumbersome task. But there is help at hand. Registrar and transfer agents (RTAs), such as MYCAMS and KFIN, offer self-declaration forms that allow investors a more convenient way to handle their investments under common credentials. In this story, Mint provides you a comprehensive guide on how to manage multiple PANs effectively on MYCAMS/KFIN.
RTAs are essentially third-party companies appointed by businesses to manage the ownership records of their shares or securities. They play a crucial role in ensuring the smooth and accurate functioning of shareholding and transactions. Many companies, especially those publicly traded, are required to appoint an RTA. Investors can contact the RTA directly for matters related to their shareholding, such as updating their address or requesting a duplicate certificate.
Self-declaration forms
Investors who do not have any valid phone numbers or email IDs, either because they have switched numbers or forgotten their email passwords, have faced hurdles in conducting online transactions in mutual funds since 1 October 2022. To rectify this, RTAs introduced self-declaration forms that enable investors to update essential contact details across all fund houses. Here is how you can do this in three steps:
1. Obtain self-declaration forms: Start by acquiring the form from the fund house where you and your family hold mutual fund investments or directly from the RTA office.
2. Provide basic details: Fill in essential information such as the fund house name, folio number, and PAN.
3. Acknowledgement: Your family member must indicate their relation by selecting the appropriate category, such as self, spouse, guardian, dependent children, dependent siblings, or dependent parents, to specify the ownership of the provided email and mobile number and sign the form.
Timeframe: The process typically takes about seven working days , ensuring a swift update of your contact details across all fund houses.
Mode of form submission: The process can be done both online and offline. In online mode, you can visit the CAMS/KFIN website to complete the process. When it comes to submission via physical mode, plan a visit to your nearest RTA (CAMS/KFIN) or the office of the asset management company that you are associated with to submit the necessary documents.
Centralized management
The self-declaration forms allow an individual to have a comprehensive overview of the family’s investment portfolio. Opting for this facility offers numerous advantages:
Ease of transactions: Conduct basic transactions such as purchase, redemption, switch, and non-financial transactions like updating bank details or KYC (know your customer) details under one umbrella for your entire family.
Simplified communication: With common contact details, you no longer need to juggle multiple email IDs or phone numbers for updates and notifications.
Centralized reporting: Manage all your investment reports conveniently under a single set of credentials, providing a unified view of your family’s portfolio across various fund houses. This also helps with tax filing.
However, in the event of family disagreements or individual updates, members can submit a separate contact details form directly to the respective RTA.
Tax clubbing?
In simple terms, tax clubbing typically refers to the combining of incomes or profits of family members in the hands of the earning member. However, in the context of a family declaration for mutual fund investments, it’s merely a matter of stating relationships and not about actual income or profit. In other words, declaring family members for mutual fund management doesn’t automatically mean their incomes or profits will be combined for tax purposes. It’s just about clarifying who the investments belong to and so doesn’t affect taxation directly.
“There is no question of tax clubbing here because it is just a matter of declaration and not income or profit" Says Nitesh Buddhadev, a chartered accountant and founder of Nimit Consultancy.
Family declaration
It’s important to note that there are challenges associated with the physical mode of submission, such as form rejection due to signature mismatches. Alternatively, there is an online process available for family declaration. Yet, challenges such as website failing to load due to server problems or delayed receipt of one-time passwords sent to your mobile number.
There are limited family options available, which may not accurately represent all scenarios. For example, if you are managing the mutual fund investment of someone who is not dependent on you, such as grown-up children, parents, or spouse, the system forces them to be shown as dependents. Additionally, there is no option to add relations like in-laws or partners and friends, further limiting the flexibility of the system
