Can you open a demat account without a PAN card? MintGenie answers
demat account is a must if you want to trade in stocks. It functions much like a bank account for stock market transactions. It digitally records all activities in the stock market and maintains electronic records of various financial instruments.
These accounts offer numerous advantages to individuals interested in trading shares, bonds, ETFs, and mutual funds. One of the key benefits of demat accounts is their ability to streamline trading processes and reduce the risks associated with paper-based transactions such as loss, damage, or theft. Opening a demat account is typically a straightforward and swift process, with uniformity across brokerage firms, banks, and other financial institutions that facilitate online trading.
However, many investors wonder whether a demat account can be opened without a PAN card. Possessing a PAN (Permanent Account Number) is paramount for every Indian citizen. This unique identifier consolidates all financial transactions in one central record.
The Income Tax department identifies PAN as the sole identification of all your transactions in the securities market, regardless of the amounts. The law allows a person to hold only one PAN card. Once generated, your PAN number does not change throughout your lifetime, even when you move to other cities or countries.
Investors generally cannot open demat accounts without PAN cards in India. Market regulator Securities and Exchange Board of India (SEBI), through its circular dated April 27, 2007, has mandated the requirement of PAN cards for individuals engaging in securities transactions in India. As per the circular, it's imperative to furnish a PAN card while opening a demat account, irrespective of the investment's purpose or size.
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