KNOWLEDGE CENTRE ELSS Funds: Meaning, Benefits & Types of ELSS Mutual Funds | Angel BEE / How To Invest in ELSS Funds Even If You Are Not KYC Compliant
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How To Invest in ELSS Funds Even If You Are Not KYC Compliant


How to invest in ELSS without being KYC compliant?

Equity-Linked Savings Scheme, more commonly known as ELSS, is a diverse equity mutual fund. The investment that you make in the same is eligible for income tax exemption as per section 80C of the Income Tax Act. Investing in ELSS is followed by better earnings as the money invested in this mutual fund is further invested in equities managed by proficient and experienced fund managers.

This is why ELSS investments are the ideal tax-saving investments. Having clearly understood its benefits, you would want to start investing in the same and start earning higher tax-exempt returns.

  • If you have a demat account, you may very conveniently log in to your account and start to invest in ELSS online at any time.
  • If you do not have a demat account, you may walk into the nearest branch with which you hold a bank account and they will help you start your ELSS investments.
  • You can also open a demat account with online brokers and start to buy ELSS funds thereof.

How to open a demat account?

Opening an online demat account has been made extremely easy by technological advancements, especially if you have an Aadhaar Card and a Permanent Account Number (PAN) card.

Mentioned below are the three steps to follow to open an online demat account.

  • Research and compare the available online equity brokers and their charges for opening and holding a demat account and trading therein
  • Having chosen the right one for you, based on the services they provide and the charges thereof, visit its website
  • On its website, go to the account-opening page, fill in the requisite details, and within a short period, you should be able to buy ELSS funds

However, having your Know Your Customer (KYC) documents at your disposal is a pre-requisite to open a demat account.

Know Your Customer (KYC)

KYC documents are essentially documents that prove your identity and/or are a proof of your residential address. PAN card, voter ID, driving license (DL), Aadhaar card, and passport are the most commonly accepted KYC documents. If you have at least two of these, you are KYC compliant to open a demat account.

How to invest in ELSS if you are not KYC compliant?

If you do not have your KYC documents, particularly your PAN card and/or your Aadhaar card, then it would take you some additional time to start investing in ELSS. It has been made mandatory by the Securities and Exchange Board of India (SEBI) for all mutual fund investors to be KYC compliant.

This does not mean that if you are not KYC compliant you cannot invest in ELSS. All you need to do is apply for your missing KYC documents and attach the acknowledgment of the KYC application along with the mutual fund investment form.

If the fund house receives the duly-filled application along with the requisite KYC/KYC application acknowledgment before their daily cut-off time, which is in most instances 3 PM, then the units are allotted on the same day, even if the money for the same has not been debited from your account.

This allocation, of course, is conditional to the approval and receipt of the new KYC and payment being cleared. Thus, even if you apply for the ideal tax-saving investment, ELSS, in a manner that the fund house receives it before the cut-off time on 31 March, along with the KYC application acknowledgment; you will be eligible for the tax exemption applicable under section 80C for that financial year.

This is how you can buy ELSS even if you are not KYC compliant. However, if you are KYC compliant and do not have a demat account, you can simply visit the service provider’s website, open your account, and start your mutual fund investment in a short period.

Whether looking for tax-saving options or simply seeking wealth-accumulating options, you need to carry out detailed research and gain a clear understanding of your own finances and budgeting. The proprietary ARQ investment engine in the Angel Bee mobile application helps you with this detailed analysis and provides recommendations that are free of human bias.

Even though you can invest in ELSS online on the last day of the financial year, it is advisable that you plan beforehand by using technologically-advanced tools such as ARQ to access the available mutual fund investment options and choose the right one that aptly fulfills your financial and investment needs.

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