Investors come under scanner | india | Hindustan Times
Today in New Delhi, India
Nov 23, 2017-Thursday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Investors come under scanner

A STARTLING 60 per cent of a total base of one lakh investors having a ?share depository account? with various broking houses and banks have never bothered to apply to the Income Tax Department for a permanent account number (PAN).

india Updated: May 03, 2006 00:50 IST

A STARTLING 60 per cent of a total base of  one lakh investors having a “share depository account” with various broking houses and banks have never bothered to apply to the Income Tax Department for a permanent account number (PAN).

“These investors, who have become the target of a probe by the Income Tax Department, had submitted application forms for opening a Demat account during the aforementioned period with just the photocopy of a driving license or the voter identification card, as broking houses themselves did not insist on submission of PAN card details by the investors, especially during 2000-03 when most of the share depository services gathered momentum in the city,” income tax sources told HT.

The other major formality for opening a share depository account during 2000-03 was to bring along a person who already had such an account with the broking house for the necessary introduction of the new applicant as a verification procedure, sources said.

There are 20 broking houses and banks in the city which are depository participants of either the National Share Depository Ltd (NSDL), or the Central Share Depository Ltd (CSDL).

In compliance with SEBI rules, none of the broking houses, acting as the depository participants of the NSDL and the CSDL, are currently accepting application forms from investors who desire to open new accounts with brokers in the absence of a PAN card.

The matter of such a large base of investors not having PAN cards came to light when a number of harried investors wanted to open new depository accounts with various broking houses and banks after SEBI decided to investigate the involvement of major banks and broking houses in the Yes Bank IPO scam.

The investors without PAN may not even have paid taxes on incomes generated through share trading activities between 2000-03, as income tax return form requires mandatory quoting of PAN across the country, sources said.