What is the maximum investment threshold for Micro-SIPs and small investor investments to qualify for PAN exemption in mutual funds, and what document is issued upon KYC compliance?

[ A ]Investments up to Rs. 50,000 per investor per financial year per mutual fund; the investor is issued a PAN-Exempt KYC Reference Number (PEKRN) by the KRA.[ CORRECT ]

[ B ]Investments up to Rs. 10,00,000 per month; the investor is issued an international passport waiver certificate.

[ C ]Investments up to Rs. 5,000 in a lifetime; the investor is issued an income tax audit exemption card.

[ D ]There is no PAN exemption; every investment above Rs. 1 must compulsorily produce a physical laminated PAN card.

Takeaway

Option A is correct: Investments up to Rs. 50,000 per investor per financial year per mutual fund; the investor is issued a PAN-Exempt KYC Reference Number (PEKRN) by the KRA.

Derivation

Under SEBI regulations, small investors and Micro-SIP investments (annual aggregate up to Rs. 50,000 per investor, per financial year, per mutual fund) are exempt from the mandatory requirement of submitting a PAN card. However, KYC compliance remains mandatory. The investor submits officially valid photo identification (such as Voter ID, Driving License, or Aadhaar) to a KRA, which issues a PAN-Exempt KYC Reference Number (PEKRN) that must be quoted on application forms. This tests financial inclusion KYC rules. The common error is confusing PEKRN with standard PAN cards.

Why the others fail

B — Investments up to Rs. 10,00,000 per month; the investor is issued an international passport waiver certificate.

Rs. 10,00,000 far exceeds the small investor ceiling; PAN exemption is strictly capped at Rs. 50,000 per mutual fund per year.

C — Investments up to Rs. 5,000 in a lifetime; the investor is issued an income tax audit exemption card.

Rs. 5,000 is an arbitrarily low figure; the statutory annual threshold for Micro-SIP PAN exemption is Rs. 50,000.

D — There is no PAN exemption; every investment above Rs. 1 must compulsorily produce a physical laminated PAN card.

SEBI explicitly provides a statutory PAN exemption for Micro-SIPs up to Rs. 50,000 per mutual fund per year using PEKRN.