You must first comprehend the procedure involved in obtaining a Demat ID to comprehend how a Demat account operates. A PAN card is a crucial document to apply for a Demat account.
The PAN number associated with the investor enables the Income Tax Department to track and monitor the investor’s tax liabilities concerning their market investments and income and investment information. It ends any commotion with tax obligations.
Demat Account number
Investors are given a 16-digit numerical code or number, the Demat account number, when they open a Demat account.
Investors are given account information, including the Demat account number, as soon as their Demat account is opened.
To make it easier for stockbrokers and investors to evaluate their investment portfolios, the Securities and Exchange Board of India has mandated that every investor have a Demat account number.
Each account is identified by a special code known as the Demat account number rather than the account holder’s name.
This 16-digit Demat account number is provided while purchasing and selling shares or applying for different IPOs to represent the investor.
Also Read: How Many Demat Accounts Can One Have?
Know your Demat account number
Investors are given a Demat account number when their Demat account is opened.
The depositories, NSDL (National Securities Depository Ltd.) and CDSL, are responsible for assigning the number (Central Depository Services Ltd).
These depositories grant different stockbrokers licenses to enroll clients and open Demat accounts on their behalf.
The investor must choose one DPs and register with them based on their needs and services.
The license includes a particular DP ID, the first eight digits of your 16-digit Demat account number, which brings you one step closer to understanding how to recognize your Demat account number.
Demat account formats often vary depending on CDSL and NSDL and the person who issues a certain Demat account number.
The CDSL or NSDL, associated with your broker firm, will give you a letter with your Demat account number whenever you register a Demat account.
It is preferable if the stockbroker tries both depository institutions because doing business with them will be easier.
In essence, a depository participant is a middleman. Knowing if your account is with CDSL or NSDL is crucial because there are times when you’ll need to mention the depository institution, as when applying for an IPO. You must verify whether your broker is connected to CDSL, NSDL, or both.
Create a Demat account
- You must open a Demat account if you don’t already have one. You do not need to pay anything by opening a free Demat account. Go to the broker’s website of choice, fill out the application with the required information, and submit it.
- A dematerialized account that gives you a place to keep your digital asset or certificate securely is what a Demat account is. You will be able to obtain the Demat account number upon successful approval.
- You have the option of opening the account offline or online. You must complete the important forms and provide the relevant documentation in both cases, either online or in person, at a brokerage or bank that offers a Demat service.
- The investor will be asked to present their PAN card, identity evidence, address proof, and other KYC documents upon completion of the brokerage firm’s due diligence process. Before your account is formed or approved by the financial institution or a bank, the procedure can take 4 to 7 days.
- The investor will be given a Client ID and a 16-digit NSDL holding identifying number once all the verifications have been completed. The depository house will inform you, and you can utilize your Demat account for trading savings or other operations.
- After this process is complete, all left to do is deposit a sum to the Demat account and invest in equities of one’s choices listed on the market.
The PAN number associated with the investor enables the Income Tax Department to track and monitor the investor’s tax liabilities concerning their market investments in addition to their income and investment information. It ends any commotion with tax obligations.
Before a Demat account is started, the Income Tax Agency must confirm the PAN card.
The PAN system is computerized that gives each person a special number that serves as their primary key. Under this key, your documents are kept safe.
Demat account from PAN
- It is simpler to obtain the Demat account number from PAN if you have already opened a Demat account. Fill out the application form at the portal of the DP of your choice with the necessary information.
- Provide KYC details like PAN card, address, and identity proof, and then submit them along with the application form.
- The broker’s end will undertake due diligence.
- Additionally, a registered email address is required. The depository house will send the Demat account via the PAN with the email. The Demat account number, however, cannot be obtained or located from PAN without the email.
- The investor will need to confirm their bank account and ECS payment methods once the digital methods are finished. Transactions can now happen more quickly and easily.
After completing these procedures, the investor will periodically get encrypted emails on the registered email address with information about their Demat account, such as account statements, stock transaction information, etc.
Finding your Demat account number from your PAN card is impossible if you don’t have an email address.
The PAN card number will be included in every letter as an account identification.
The advent of the digital age and the government’s effort to improve communication and connectivity among its agencies have made this very simple process easier.
The proper use of PAN cards will boost financial literacy, which will improve banking for the general public.
Amit Gupta is the creator of FreeDematAccount.in, a website that specializes in Demat accounts and provides assistance to all its users in navigating through complicated decisions. After completing his high school certification, Amit spent half a decade learning about Demat accounts from brokerages. Before forming FreeDematAccount.in, Amit worked for a Demat account brokerage.