Documents Required to Open a Demat Account

Overview

You need a demat account to hold your shares and securities in the electronic format. And opening an online demat account is a fairly straightforward process. To begin with, you need to select a depository participant (DP). DPs can be banks, financial institutions, brokers, or any other entities authorized by SEBI to act as an intermediary between you, the investor, and the depository.

Before you begin the process of opening a demat account, you’ll need to look up the depository participant’s terms and regulations to understand the documents needed to get your account activated. Knowing the list of documents needed for an online demat account beforehand can help you be prepared for the account opening process. This, in turn, will help you get done with the application process quicker. Furthermore, having your documents in place can also make the approval process faster from DP’s end.

Eligibility to Open a Demat Account

In order to open a demat account with a depository participant, you need to first ensure that you’re eligible for the same. The following categories of individuals can open a demat account in India.

• Resident individuals
• Minors
• Non-resident Indians

In the case of minors, the account is to be operated by a guardian or a parent till the minor attains 18 years of age.

Non-individuals in the following categories are also eligible to open a demat account with a depository participant.

• Corporate entities
• Partnership firms, provided the demat account is in the name of the partners
• Registered/unregistered trusts, provided the demat account is in the name of the trustees
• Registered/Unregistered societies, provided the demat account is in the name of the members
• An Association of Persons (AOP)
• Limited Liability Partnership (LLP)

In addition to this, banks and mutual funds can also open a demat account. Foreign Institutional Investors (FII) and Foreign Portfolio Investors (FPI) can open trading accounts.

Types of Documents Required for Demat Account Opening

While the exact set of documentation requirements may vary from one depository participant to the next, there are generally three classes of documents that every DP needs you to provide in order to see the demat account opening process through. These are three primary types of documents required.

• A proof of identity
• A proof of address
• A proof of income

List of Documents Qualifying as Proof of Identity

Any document that is registered with the government and that has your photograph on it is admissible as proof of your identity. Typically, these are some options that can act as an identity proof.

• Your PAN card with a valid photograph
• Any document with a Unique Identification Number (UID), such as Aadhaar, passport, voter ID card, or driving license
• Your ration card, provided it contains your photograph
• Any identity card or document containing your photo, issued by one of the following bodies:
  • Central or State Government and its departments
  • Any statutory or regulatory authorities
  • Any Public Sector Undertakings (PSUs)
  • Any scheduled commercial banks
  • Any Public Financial Institutions
  • Any college affiliated to universities
  • Any credit cards or debit cards issued by banks
  • Member IDs issued by professional bodies like ICAI, ICSI, ICWAI, or the Bar Council, among others

List of Documents Qualifying as Proof of Address

To fit into this category, your documents need to contain your address. Any of these documents can be admitted as proof of address for the purpose of opening your demat account.

• Your passport
• Your voter’s identity card
• Your ration card
• Any registered lease or sale agreement of drawn up for the residential property you’re residing in
• Your driver’s license
• Any utility bill with your address on it, such as an apartment maintenance bill, a gas bill, the telephone bill for your fixed landline connection, or your electricity bill, provided they’re not older than 3 months from the date of application
• An insurance copy
• A copy of your bank account statement or passbook, not more than 3 months older than the date on which you’re applying for your demat account opening
• Documents issued by any government or statutory authority
• Any proof of address issued by one of the following persons or bodies:
  • Bank managers of scheduled commercial banks, co-operative banks, or multinational foreign banks
  • Any gazetted officer
  • A notary public
  • An elected representative to the Legislative Assembly or the Parliament
• Any identity card or document containing your address, issued by:
  • Central or state government and its affiliated departments
  • Any statutory or regulatory authorities
  • Any Public Sector Undertakings (PSUs)
  • Any scheduled commercial banks
  • Public financial institutions
  • Colleges affiliated to Universities
  • Professional bodies like the ICAI, the ICWAI, the ICSI, or the Bar Council, among others

In case you’re a judge at the high court or the supreme court, a self-declaration giving your new address is an admissible proof if you’re opening a demat account for yourself. Additionally, any proof of address in the name of your spouse may also be accepted.

List of Documents Qualifying as Proof of Income

Another set of documents required for demat account opening deals with providing proof of your income. Some examples of papers that are admissible as proof of your income are listed here.

• A copy of your Income Tax Return (ITR), as it was submitted to the Income Tax Department
• A Net Worth Certificate that has been duly certified by a Chartered Accountant
• Any proof of your salary, such as a recent salary slip or form 16
• A statement of your demat account holdings with any other eligible Depository Participant
• A statement from your current bank account showing the history of your income for the 6 months preceding the date of application

Other Documents Required to Open a Demat Account

Your PAN card is a mandatory proof required for demat account opening. In addition to the documents mentioned above, you will also be required to submit these papers.

• A proof of your bank account, such as a cancelled cheque or your passbook
• A recent passport-sized photograph of yourself

Documents Needed to Open a Demat Account for a Minor

IIFL offers you the facility to open a demat account for a minor. The minor is required to be the sole holder of the account, meaning that no joint holders or nominees can be appointed. Furthermore, the account of the minor can only be operated by the parent or guardian concerned.

In case you’re planning to open an online demat account in the name of your minor child, you’ll need to produce the relevant documents to proceed with this undertaking. Here’s what we require.

• A copy of the minor’s PAN card
• A copy of the minor’s birth certificate
• A copy of the PAN card of the guardian, with the photo clearly visible
• ny proof of bank accounts held in the name of the minor
• Any proof of address of the guardian

Only the minor’s father or mother can be considered as a guardian. In case the guardian’s relationship with the minor is not parental, then the said guardian should have been appointed by a court order.

Attestation of Documents Needed to Open a Demat Account

You may also need to get some of your documents attested in order to successfully complete the demat account opening procedure. In case this is necessary, here’s a list of people who are authorized to attest your proofs.

In case you are a Citizen of India:

• Notary public
• A gazetted officer
• Any manager of a scheduled commercial bank, a co-operative bank, or a multinational foreign bank

In case you are a Non-Resident India (NRI):

• Authorized officials of overseas branches of scheduled commercial banks that are registered in India
• The manager of the branch of any public sector Indian bank located in your area of residence
• A notary public
• Any court magistrate
• A judge
• An official of the Indian Embassy or the Consulate General in the country where you reside

To attest your documents, the person qualified to do so should affix the following details on the copy of the relevant document.

• Name
• Designation
• Seal

Documents Required for Demat Account in the name of an NRI

If you’re a non-resident Indian looking to open a demat account with a depository participant based in India, like India Infoline, you have the option to choose from any one of two types, namely non-resident external (NRE) or non-resident ordinary (NRO).

The documents you’ll need to produce are listed here.

• A proof of your Indian address proof, required only in the case of an NRO account
• A proof of your foreign address proof, required compulsorily in both cases
• A Portfolio Investment Scheme (PIS) letter issued by the RBI
• A copy of your PAN card
• Any proof of your bank, such as your passbook or a statement of your bank account, clearly indicating the details of whether it is an NRE or an NRO savings account

If your bank proofs do not mention the category of the account (whether NRE or NRO), a verification letter is required from your bank, mentioning this detail. Also, all the copies of your KYC documents should be attested by any entity qualified to do so.

Conclusion

Now that you have a detailed guide to get all your documents ready, you can be adequately prepared to supplement your demat account opening form with the necessary papers. Having your documents in order makes it easier for the depository participant to process your application quickly, so your demat account is opened faster and smoothly, without any hassle. This way, you get to begin trading in the financial markets sooner than later. It also gives your trading experience a neat start, devoid of any roadblocks.