Demat account is an important part of any stock market trading or investing activity. It is required for holding shares and other securities in dematerialised form. Any shares and securities bought by an individual can be stored in a Demat account in electronic format. An investor or trader cannot buy, sell, or hold securities without a Demat account. With rapid digitization in all aspects of life, opening a Demat account is a very easy process, as it can be entirely done online.
However, for opening a Demat account, there are some pre-requisites and documentation requirements that one has to follow. Many stock market aspirants apply for a Demat account, but some may not provide all the required documentation.
Here, we will provide a guide for applicants who want to open a Demat account but do not have a PAN card. To begin, here’s the process to open a Demat account.
To request a Demat account online, investors can download the Fisdom app on their smartphone. As part of the account opening process, the applicant must furnish certain key documents to complete the KYC.
Listed here are the commonly sought documents for Demat account opening:
The Demat account opening process can be initiated only after these documents are submitted by the applicant and verified by the broking platform.
A PAN card is an important document that is sought by brokers from applicants who wish to open a Demat account. As per SEBI guidelines, one cannot request for a Demat account opening without furnishing a PAN card. Here are the pre-requisites surrounding PAN card details for Demat account opening:
PAN (Permanent Account Number) card is an important document that every Indian citizen must hold. This document is primarily used by the Income Tax department to consolidate and easily track all financial transactions of an individual.
As per the Income Tax department, a PAN card is used as the sole identification proof of all transactions that an individual has entered in the securities market. The IT rules allow only one PAN card per individual. Once it has been generated, the PAN number cannot change even if one requests for a name change or address change.
In circumstances other than the above-mentioned, it is mandatory to submit a PAN Card for Demat account opening.
PAN is an important document in India and a must for those who want to enter the securities and financial investment space. For Indian citizens and NRIs, a PAN card is, therefore, an essential document for opening a Demat account. One can apply for a Demat account without a PAN card if eligible under any of the exceptions mentioned above.
Yes, you can do intraday trading in stock markets if you do not have a Demat account. This is because intraday trading does not require delivery of securities and therefore does not require a Demat account. However, for any delivery trading in stock markets, a Demat account is essential.
Yes, a Demat account can be opened in a minor’s name. This is also possible since a minor is allowed to hold a PAN card.
No, a trading account is not the same as a Demat account. A trading account acts as a bridge between broker and bank, whereas a Demat account holds securities in dematerialised form.
No, you need not submit a physical copy of your PAN card while opening a Demat account online. This is because most online broking platforms allow online KYC that can be completed by uploading soft copies of documents.
If you have lost your PAN card, you can apply for a duplicate copy before requesting for a Demat account. This is because a PAN card is mandatory for Demat account opening.
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