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Required Documents for a Demat account

November 20, 2018 By Susan Paige 1 Comment

A Demat account offers similar services to a bank account, except that it holds financial assets such as securities in it. In order to trade in the stock market, you must open a Demat account and to do so, you need to provide a list of documents. You can open a Demat account with brokers, banks or depository participants such as Kotak Securities. Most documents required to open Demat account are standard in nature. Here is a detailed list of documents required for Demat account.

PAN Card

The Permanent Account Number or the PAN card is a mandatory record to open a Demat account. As part of the overall documentation, you must submit a self-attested copy of your PAN card. Ensure that the copy has a clear and visible display of your photograph. The PAN card also works as your identity proof.

Concerning the opening of a Demat account, there are a few exceptions concerning the mandate of a PAN card. You may not be eligible to open a Demat account if the following apply to you. These include:

  • If you are related to the income slab according to Section 139 A of the Income Tax Act
  • If you reside in the state of Sikkim
  • If you are an institutional client such as mutual fund house, scheduled commercial bank, multilateral or bilateral development financial institution, State Industrial Development Corporation, Foreign Institutional Investor (FII), Value Capture Finance (VCF), and Foreign Venture Capital Investor (FVCI).
  • If you conduct transactions on behalf of the state or central government or if you are an official appointed by the Indian court.

Address Proof

To serve this requirement you have multiple options. You could provide any of the following documents as your address proof:

  • Aadhaar card
  • Passport
  • Ration card
  • Voter ID card
  • Driving license
  • The first page of your bank passbook or your account statement, not older than three months
  • Electricity bill, not older than two months
  • Landline telephone bill, not older than two months
  • Attested Rent Agreement
  • Agreement Of Sale or Leave And License Agreement
  • A central/state government or PSU issued ID card
  • For college students, an ID card issued by your respective college/university or a professional body such as the bar council, The Institute of Cost Accountants Of India (ICAI) or The Institute of Company Secretaries of India (ICSI)

You may have to keep your original document ready at hand while submitting a signed copy of any of the above documents.

Proof of Income

To trade in the derivatives market, you must provide either of the following documents as an essential requirement. These include:

  • Form 16
  • A copy of your IT returns
  • Bank statement of the last six months
  • A verified certificate issued by an authorised chartered accountant confirming your net worth
  • Stockholding statement

Cancelled Cheque

Another important document is to provide an original cancelled cheque that has clear details concerning:

  • Your bank account number
  • The bank name and address
  • The IFSC/MICR code
  • Your name as stated in the account

Passport Sized Photograph

Based on the number and kind of Demat accounts you wish to open, you may have to provide a specific number of recently taken passport sized photographs. The requirement generally ranges between one and three photographs. Ensure the photographs you provide are the most recent. These must be affixed to the account opening form with your signature cross-signed across it.

Corporate Demat Account

If you are opening a corporate Demat account, you will need to supply additional documentation, such as:

  • A copy of your company’s balance sheets of the last two financial years
  • A copy of the board’s resolution
  • Copies of your shareholding pattern, mentioning all the stakeholders
  • Copies of your company’s Certificate Of Incorporation, Memorandum and Articles Of Association
  • A list of all the signatories in the company along with their authorised signatures and passport sized photographs

Conclusion

Ensure that you comply with all the relevant considerations while submitting the documents to open your Demat account. Once the documents are accepted and verified, your chosen depository participant will provide you with a duly stamped and signed acknowledgement slip. You will also receive additional acknowledgement receipts and delivery instructions along with your Client ID to help you start trading on your newly opened Demat account.

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Comments

  1. Best Demat Account in India says

    October 14, 2019 at 7:29 am

    thanks for the information

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