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List of Documents required for Open a Trading Demat account in 2021

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What is a Demat account?

A Demat account is a “Dematerialised securities account” which helps the individuals or account holder hold shares, mutual funds, bonds and other securities in a digital format. Like a bank account holds your money, a Demat account holds securities like stocks, mutual funds, Dematerialised gold units, bonds, debentures, etc.

A Demat account helps you hold your securities in digital format. In India, there are 2 depositories that provide Demat services namely NSDL and CDSL. Depository participants or stockbrokers like Samco facilitate services of opening a free Demat account.

How Dematerialization Works ?

With the age of computers and the Depository Trust Company, securities no longer need to be in certificate form. They can be registered and transferred electronically.

Through dematerialization, so-called DEMAT accounts allow for electronic transactions when shares of stock are bought and sold. Within a DEMAT account, the certificates for stocks and other securities of the user are held as a means for seamless trades to be made.

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.
  • Any identity card or document containing your photo, issued by one of the following bodies:
  1. Central or State Government and its departments
  2. Any statutory or regulatory authorities
  3. Any Public Sector Undertakings (PSUs)
  4. Any Public Financial Institutions
  5. Any college affiliated to universities
  6. Any credit cards or debit cards issued by banks
  7. 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.

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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

Demat and trading account – the linkage and relationship
While people commonly mistake Demat account and trading account as the same thing, they are tightly linked to each other, but they are NOT the same.

A Demat account is in essence like a custody account where financial assets are held in custody for the account holder. No movement of funds happens in a Demat account.

However, to actually buy and sell shares, an investor needs an online trading account that is linked to a Demat account. Both, movement of funds and securities happen in an online trading account.

A Demat account is, in a way, like your bank account. If you open a Demat account online, you will have to upload your PAN card and proof of address by logging in to the DP (broker / bank) website. The documents are mandatory. a common requirement across brokers, banks and other financial institutions that act as an online trading platform. You will need to ensure that the papers are valid as at the date of delivery and that they have not crossed the expiry date.

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Personal details: Furnish identity proof and address proof in the prescribed format. Most brokers / banks fill them in advance once you provide them with PAN and other documents. Validate and cross-check.

Bank, income details: You will need to share with them your Bank Account Number and IFSC code for opening a Demat account. However, there is no cause for concern as the information is secure with the broker. You will also have to provide your income details.

Apart of the documents for demat account, you will also have to provide two to three photographs of your Deposit Participant (DP) from your checklist.
Documents to open a quick checklist Demat account
A of documents required to opening a Demat account with a financial institution, including whether a broker or bank would be:

Professional Identity (POI): Driving license, Voter ID, UID or Unique Identification Number etc will be accepted as proof of identity.

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