Can a demat account be opened without a PAN card?
Your PAN Card is a mandatory requirement to open a demat account.
How to open a demat account?
Before we answer the question, ‘how to open a demat account’, let’s first try and understand what a demat account is. A demat account holds all shares and securities in a dematerialised or electronic format. As per SEBI norms, demat accounts are just as necessary as trading accounts for people who wish to invest and trade in the Indian stock market. One cannot invest in shares and securities in the absence of a demat and a trading account.
Demat account opening
Demat accounts can be opened offline by visiting the office of a stock broker or a bank offering demat facilities. You can also open a demat account online. Many brokers offer a free demat account opening facility. Few brokerage houses also provide three accounts – demat, trading and savings combined in one through their accounts.
Documents needed for demat account opening
As a part of the demat account opening procedure, you need to submit some documents and complete the KYC (Know your Customer) process. As such, you need to submit your proof of identity, address documents and a copy of your PAN card as per the Official Valid List (OVD) of documents.
Is PAN card a must for demat account opening?
Yes, it is. You cannot open a demat account without a PAN card. The SEBI made PAN card mandatory for opening a demat account. The investor needs to show the original PAN card at the time of opening a demat account. Additionally, you have to submit a self-attested copy of your PAN card.
If the demat account has joint holders, PAN is required for all the joint holders.
The importance of PAN card
PAN stands for Permanent Account Number and a PAN card is an important document that all Indian citizens must have. Your PAN number lets the Income Tax department link all financial transactions made by you. According to the IT Department, PAN is the sole identification for all financial transactions in the securities market, irrespective of transaction amounts.
As per the law, a person can hold only one PAN card. Once assigned, your PAN number does not change during your lifetime – whether you move to another city or country (become an NRI).
Demat account and PAN card
You can open multiple demat accounts against one PAN card. There is no limitation to the number of demat accounts one can open. However, all these demat accounts will be linked to the same PAN card.
Disclaimer: The contents herein mentioned are solely for informational purpose and shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon