Can I open a demat account without PAN card? The answer is No. If you don’t have a PAN card then, according to the SEBI guidelines that came into effect in 2007, you won’t be able to open a demat account sadly.
But why do you need a PAN card to open a demat account?
PAN card stands for Permanent Account Number card and it is the only source for the Income Tax department to track down your financial transactions.
- Since your demat account means holding, buying, and selling shares, the IT department needs to know about all the financial transactions that you are making through your demat account and it is only possible with the help of a PAN card that has your PAN Number written on it.
- It is very similar to your bank account where you make financial transactions and the Income Tax department links those transactions to you with the help of your PAN number.
- In case you don’t have a PAN card, it is vital you apply for one and only then you can apply for the opening of your demat account.
- In case you apply for a joint demat account, every member of that account must submit their PAN cards to their DPs.
Other documents required for opening a demat account
Along with the PAN card, you must have several other documents to get started in the stock market.
- Identity Proof: Aadhar Card/ Voter ID Card/ Passport/ Driving License
- Address Proof: Ration Card/ Voter ID Card/ Passport/Driving License/ Flat Maintenance bill/ Insurance Copy/ Rent or Sale agreement of residence/ Utility Bill
- Canceled Cheque with Bank account details
- Proof of Income (Required only for derivative trading): Copy of Income Tax Returns
- Passport size photographs
In a nutshell, under the SEBI Regulations Act 2007, it is absolutely mandatory to have a PAN card to open a demat account even though there are minor exceptions to this.
Hope we have answered your question. If you have any other doubt related to the stock market, please drop them down in the comments. We will answer them as soon as we can.
