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Frequently asked questions

What are the Documents Needed in Order to Open a Demat Account?

| Account Opening Form –

Duly filled Demat Account Opening Form (Individual/Joint) along with KYC Application Form (Individual/Joint)

Photograph of each holder/signatory to be pasted on the form and signed across


| Proof of Identity – POI (list of documents admissible)

    PAN card with photograph (mandatory). Although there are a few exceptions to the   

    PAN Card rule –

·       Traders relating to specific income slab as per section 139A.

·       Traders resident of Sikkim state.

·       Transactions done on behalf of Central or State governments or by officials appointed  

·       by Indian courts.

 

The applicant should submit any one of the following:

·       Unique Identification Number (UID) (Aadhaar)

·       Passport

·       Voters ID card – Valid Driving license

·       Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.


| Proof of Address – POA (list of documents admissible)

·       Passport

·       Voters Identity Card

·       Ration Card

·       Registered Lease or Sale Agreement of Residence

·       Valid Driving License

·       Utility bills like Telephone Bill (only landline), Electricity bill or Gas bill – Not more than 3 months old.

·       Bank Account Statement/Passbook — Not more than 3 months old.

·       Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks/Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Identity card/document with address, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members.


| Other Documents

      Bank Account Details – An original cancelled/investment amount filled cheque that bears your printed name, Account 

      number, IFSC Code, MICR code, bank and branch details.

     

      It is requisite to provide proof of income or the applicant’s net worth if they want to invest in Derivatives (futures and stock) 

      or the commodities market. This can be provided by either of the following documents –  

      

·       Form 16

·       IT Acknowledgement Copy

·       Bank statement for the last six months

·       Stock Holding statement

·       Certificate provided by a verified Chartered Accountant that confirms your net worth.

·       If the primary holder is a minor, then the account opening form should have the details of the parent or guardian along with their signature, personal information, and respective documents.

| Account Opening Form

·          Duly filled Demat Account Opening Form (Corporate) along with KYC Application Form (Corporate)

·         Photograph of each holder/signatory to be pasted on the form and signed across

Proof of Identity – POI (list of documents admissible)

·           PAN card copy of the corporate.

The applicant should submit any one of the following:

·         Unique Identification Number (UID)

·         Udyog Aadhar of the body corporate or Aadhar of all the signatories.

·         Passport (of all the signatories)

·         Voters ID card (of all the signatories)

·         Valid Driving license (of all the signatories)

·         Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.

 

| Proof of Address – POA (list of documents admissible)

·        Document registered with Registrar of Companies along with the Copy challans of payments made to ROC.

·         Bank Statement not more than 3 months old along with an original cancelled cheque.

·         Registered copy of Leave & License agreement, self-attested (by authorized signatories as per Board Resolution)

·         Registered copy of Agreement for Sale, self-attested (by authorized signatories as per Board Resolution)

·         Copy of Telephone bill / Electricity, not more than 3 months old in the name of a body corporate, self-attested (by authorized signatories as per Board Resolution)

 

Additional documents to be obtained for Corporate over and above the Identity & Address proof:

·         Copy of the balance sheets in the name of a body corporate for the last 2 financial years (to be submitted every year)

·        Copy of latest shareholding pattern of the Body corporate including a list of all those holding control, either directly or indirectly, in the company in terms of SEBI Takeover Regulations, duly certified by the company secretary/Whole time director/MD (to be submitted every year)

·         Photograph, POI, POA, PAN and DIN numbers of whole time directors/two directors in charge of day to day operations.

·        Photograph, POI, POA, PAN of individual promoters holding control – either directly or indirectly.

·         Copies of the Memorandum and Articles of Association and Certificate of Incorporation.

·         Copy of the Board Resolution for investment in securities market.

·         Authorized signatories list with specimen signatures.

 

| Other Documents

·         Bank Account Details – An original cancelled/investment amount cheque that bears the printed name of Body Corporate, Account number, Bank and Branch details, IFSC Code, and MICR code. 

| Account Opening Form

·         Duly filled Demat Account Opening Form (Individual) along with KYC Application Form (Individual)

·         Photograph of each holder/signatory to be pasted on the form and signed across.

Proof of Identity (list of documents admissible)

·         Passport (mandatory)

·         PAN card with photograph (mandatory)

 

The applicant should submit any one of the following:

·       Unique Identification Number (UID) (Aadhaar)

·       Voters ID card

·       Valid Driving license

·       Identity card/ document with applicant’s Photo, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities, Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members; and Credit cards/Debit cards issued by Banks.

Proof of Address (list of documents admissible)

·       Passport (mandatory)

·       Voters Identity Card.

·       Ration Card

·       Registered Lease or Sale Agreement of Residence.

·       Valid Driving License.

·       Utility bills like Telephone Bill (only landline), Electricity bill or Gas bill – Not more than 3 months old.

·       Bank Account Statement/Passbook — Not more than 3 months old.

·       Proof of address issued by any of the following: Bank Managers of Scheduled Commercial Banks/Scheduled Co-Operative Bank/Multinational Foreign Banks/Gazetted Identity card/document with address, issued by any of the following: Central/State Government and its Departments, Statutory/Regulatory Authorities, Public Sector Undertakings, Scheduled Commercial Banks, Public Financial Institutions, Colleges affiliated to Universities and Professional Bodies such as ICAI, ICWAI, ICSI, Bar Council etc., to their Members.

 

Additionally, the following also need to be explicitly obtained for NRIs:

·         Declaration that he/she has complied and will continue to comply with FEMA regulations.

·         Copy of the RBI approval letter, if any, for acquiring securities

·         RBI reference and date mentioned in the RBI approval letter should be entered according to whether the NRI/FN has ever purchased securities from the secondary market / has been allotted securities in the primary market / or does not hold any securities.

·         While processing De-materialization, receipt, delivery or pledge instructions from NRI Client, the DP must obtain a copy of the relevant RBI approval letter.

 

| Other Documents

·         Bank Account Details – An original cancelled/investment amount cheque that bears your printed name, Account number, IFSC Code, MICR code, and Bank and Branch details.

1)RISK– Before 1996, possessing shares as paper certificates came with a lot of problems. The risks included loss of certificates, damage to the certificates, or misplacing them. The paper certificates also caused high incidences of theft and forgery. Dematerialization of shares eliminates all these threats and makes share trading a safer experience.

2)EASY TO HOLD – Having a demat account makes shares and their trading accessible. Investors can now easily trade in securities, view their transaction history, analyze their holdings, etc., at the click of a button. It also makes management and changing any personal details linked to the demat account easier. It is easy now to change the linked address, linked phone number, linked bank details, and any such account-related changes for every company stock from the comfort of one single demat account.

3)EASE OF TRADING – In case of paper share certificates, they have to be sent to the issuing company or the Registrar and Transfer Authority to get the ownership of shares transferred. This entailed a very costly procedure with delays and loss of certificates. With a demat account, you can transfer shares at the click of a button. Demat account has made share trading a seamless, streamlined, and cost-effective process.

4)REDUCED COSTS – If an investor wished to transfer physical share certificates, they had to pay stamp duty, making it a very cumbersome and costly procedure. Dematerialization of shares has ensured a smooth transfer of shares online, thus eliminating stamp duty and reduced other applicable transaction costs.

5)REDUCED TIME – Trading in shares through a demat account considerably reduces the time taken for buying and selling of stocks. Introduction of demat account and dematerialization of shares have introduced intra-day trading on online trading platforms. Investors can also change their registered personal details in all the stocks through the single point of a demat account. This has reduced the time taken to trade in securities and manage the portfolio.

6)ODD-LOT PROBLEM RESOLVED – Before the advent of demat accounts, there were various restrictions on the selling of shares. Traders could not sell their shares in odd-lots, which caused a lot of problems. However, trading through a demat account has eliminated all these restrictions. Shareholders can now sell their shares in any number with the click of a button from the comfort of their online accounts.

7)VARIETY OF INVESTMENTS – The investment options have diversified over the years and include options like mutual funds, government bonds, government securities, Exchange Traded Funds, etc. A demat account allows you to store all the different types of investments in their electronic format.

Once an investor decides to trade in online equity shares and other investment options like mutual funds, bonds, government securities, and exchange-traded funds, he can approach a Depository Participant registered with either the NSDL or the CDSL. Once the documentation process is complete, the DP opens a Demat account for the investor, either with the NSDL or the CDSL.

The investor is provided with a Unique ID, your Demat account number. The total characters in every demat account number in India are 16; however, the format of the account number depends upon which central depository the account is opened with. In NSDL, the first two characters are alphabets determining the country the investor belong to (e.g., IN98765432123456 for India). For CDSL, every character is a numerical (e.g., 9876543212345678).

Every account number is a combination of the DP ID + investor’s client ID. The client ID is unique to every investor and identifies their specific portfolio. The first 8 digits are the DP ID, which is the unique identification number provided to the Depository Participant by the Central Depository. The next 8 digits are the investor’s client ID. So for the NSDL, IN987654 is the DP ID, and 32123456 is the client ID.

If they wish to start buying the securities, the investors may have to provide a cheque. The Depository Participant, now as the investment broker, will purchase the electronic or dematerialized shares for you and maintain them in your Demat account. The investor can view them in the Statement of Holdings. If the investor chooses an online platform, the holdings can be viewed online. Generally, the shares are credited by the DP on a T+2 basis, i.e., Trading Day + 2 days.

If the investor wishes to sell the shares, a delivery note with detailed information regarding the stock to be sold has to be given to the Depository Participant (DP). The DP will sell the respective shares, and the money will be credited to the investor. If the investor is using an online platform, the debit of shares and the credit of money are immediately visible in the account.

Some traders like to enjoy the features of both a full-service broker and a discount broker. Multiple aspects determine the quality of a brokerage firm. Since not all brokers can be good at all the aspects, some traders like to open separate demat accounts with different brokers capitalizing on the specialization of each.

However, having two or multiple demat accounts is advantageous only for seasoned and serious traders. Some traders wish to segregate their investments based on duration, goals, stock exchange, stock type, etc. Such traders can open multiple demat accounts to store different types of securities, thus, eliminating any confusion and streamlining the process.

Here, the answer is NO!

As per the rules, a trader is not allowed to open two or more demat accounts with a single stockbroker. You may have multiple trading accounts and link them to a single demat account; however, you cannot have numerous demat accounts at one firm.

Even though it is legal to open multiple demat accounts for a single trader, there are some advantages and disadvantages of the same. Let us have a look at them.

Advantages of Multiple Demat Accounts –

Opening multiple demat accounts is advantageous only for traders who are seasoned in equity trading and have the time to maintain multiple demat accounts.

Segregate long-term and short-term investments in different accounts

Segregate investments based on goals

Separate accounts for storing varied types of investments like commodities, mutual funds, shares, F&O, etc.

It makes consolidating the investments easy and eliminates confusion

A Disadvantages of multiple demat accounts –

It is not advisable to have multiple demat accounts unless you are a seasoned trader who understands the intricacies and demands of equity investment. If not, you will face a lot of trouble while keeping track of all the accounts. Some of the disadvantages of multiple demat accounts are –

1.You will have to AMC for every demat account –Holding a demat account with a broker attracts Annual Maintenance Charges (AMC). If you hold multiple demat accounts, you will have to pay multiple AMC for maintaining your accounts. This may become cumbersome and a costly affair for people who do not trade regularly or in large amounts. It can also become challenging to keep track of all the charges to be paid to all the different brokers.

2.Tracking different Demat accounts is tiresome –As stressed multiple times, multiple demat accounts is a good option only for traders who are adept at trading in equity investments. They know the intricacies of the market and can keep track of their investments. For others, holding multiple demat accounts can be a tiring process. It is very difficult to maintain a record of all the holdings in different accounts. It is cumbersome to remember to pay charges on ever account, consolidate the holdings of each account, and maintain a proper record of every transaction.

3.Inactivity in a demat account for a specified period can lead to the account getting frozen –As it is difficult to track multiple demat accounts, one of the accounts may get sidelined and remain inactive for a long time. This may result in the account getting frozen by the broker. In the case of multiple accounts, it becomes difficult to update information in every account on time. As a result, you may not receive updates or alerts for freezing of accounts on time. You may also not pay much attention to the account, and it may keep accumulating charges and fines, which you may have to bear the burden later.

No, it cannot. But it may open one in the name of the karta (head of the family).

A Demat account can be opened by different types of investors, like an individual investor, joint investors, corporate and NRIs. It can also be opened in the name of a minor. Let us have a look at the procedure to be followed and the documents to be provided for opening a Minor’s demat account.

The Indian Contracts Act,1872 lays down that minors cannot be a party to any contract or agreement. But, the Companies Act, 2013 allows any person of any age to hold shares of a company. Therefore, a minor demat account can be opened in the name of the minor but he or she cannot actively buy or sell shares themselves. The shares have to be transferred to the minor as gifts by a guardian. Hence,only the parents or a legal guardian can open a demat account in the name of the minor child. The natural or legal guardian has complete authority regarding opening, managing and closing the demat account of the minor until the child attains 18 years of age. Following are some of the documents that have to be provided to open the demat account of the minor.

1)Account Opening Form: A duly filled demat account opening form with all the relevant details of both the minor and the guardian. Two separate KYC forms, one for the guardian and the other for the minor, have to be provided with the account opening form. All the signatures on the account opening and KYC forms have to be made by the guardian.

2)Proof of Identity–POI:

a)PAN Card of the guardian and the minor is to be compulsorily provided.

b)Any other applicable PoI document like Aadhar Card, Passport, Voting Card, Driving License has to be submitted for both guardian and the minor.

3)Proof of Address–POA: Applicable PoA documents from among Aadhar Card, Ration Card, Registered Lease or Sale agreement of residence, Utility bills, etc. have to be provided.

4)Birth Certificate of the minor has to be provided.

5) Bank account details of the guardian, where the minor is a joint holder, is required. A separate bank account of the minor is not necessary.

6) In case of a legal guardian, the respective court order appointing the person as the guardian of the minor.

Once, all the documents are submitted to the depository participant (broker), he opens the account in the name of the minor. It is important to remember that the minor demat account neither is nor can be, opened as a joint account.

The minor does not have any tax implications from the earnings made through the demat account. The minor’s income is added to either parent’s income (whoever’s income is more) or the guardian’s income.

A parent can be the guardian to the demat accounts of all of his or her children.

A minor demat account allows trading in Equity deliveries. A minor, through his guardian and demat account, can also apply to IPO and buyback offers.

If the guardian of a minor’s demat account dies, the account is labeled frozen, and all transactions are stopped till a new guardian submits a duly completed fresh KYC form. All the KYC documents including Identity proof, address proof, bank account details, etc. have to be provided along with the original death certificate of the deceased guardian. The copy of the court order, in case a legal guardian is appointed, should also be submitted.

No. PAN is compulsory to open a Demat account.

Customer has to submit the duly filled ‘ change in signature form’ along with copy of PAN card to the Demat concern branch.

Approach our branch and submit the required proofs and change form attested to have your earlier details changed to new ones, reach us through contact@diyaequity.com or 044-4745 5130.

If you have forgotten your password, then there is no need to worry. You can set a new password through the site using our the Forgot Password Option available in the login form. It will prompt you to enter your user code and mobile number. You can then reset your password. You can reach us on the number 044-4745 5130. Alternatively, drop in an email at contact@diyaequity.com with your query, and you will receive guidance on how to reset your password.

If you already have a Demat account with a particular depository and wish to change to another, you can do so. You have to fill the Delivery Instruction Slip (DIS) book and submit it to your broker. Fill the relevant details like your securities information, ISIN number, and the new depository participant’s ID (An ISIN number is a unique 12 digit alpha-numeric identification number allotted for a security). Your broker will then send your request to the DP. The DP will then transfer the shares to your new Demat account. If the DIS form is duly filled, the transfer takes place within 24 hours or the next business day. Brokers charge a cost for the transfer of a Demat account. Charges differ from broker to broker.

Portfolio Management Services

Portfolio management, unlike mutual funds, is a highly personalised service. Each investor has a separate portfolio of shares. Besides, there is no entry or exit load in PMS.

Minimum investment for joining EQ PMS is Rs.50 Lacs.

Equity investments are subject to market risks. Hence, the capital is not guaranteed.

As per SEBI guidelines, there is no lock-in period for your investments. You can withdraw your funds partially or terminate the account at any time.

A PMS agreement has to be signed between the investor and the portfolio manager. An identity proof (copy of PAN card/Passport) along with a photograph is required..

In PMS there are 3 types of incomes:


Short term gains: Gains realized on sale of investments within one year; taxed at 15%.


Long term gains: Gains realized on sale of investments after one year and above Rs.1 Lakh; taxed at 10%.


Dividends:  Tax free at the hands of investors up to Rs. 10 Lakhs.

Yes you can, through the Portfolio Investment Scheme (as allowed by the Reserve Bank of India) either on a repatriation or non-repatriation basis.

A Demat account can be opened by different types of investors, like an individual investor, joint investors, corporate and NRIs. It can also be opened in the name of a minor. Let us have a look at the procedure to be followed and the documents to be provided for opening a Minor’s demat account.

The Indian Contracts Act,1872 lays down that minors cannot be a party to any contract or agreement. But, the Companies Act, 2013 allows any person of any age to hold shares of a company. Therefore, a minor demat account can be opened in the name of the minor but he or she cannot actively buy or sell shares themselves. The shares have to be transferred to the minor as gifts by a guardian. Hence,only the parents or a legal guardian can open a demat account in the name of the minor child. The natural or legal guardian has complete authority regarding opening, managing and closing the demat account of the minor until the child attains 18 years of age. Following are some of the documents that have to be provided to open the demat account of the minor.

1)Account Opening Form: A duly filled demat account opening form with all the relevant details of both the minor and the guardian. Two separate KYC forms, one for the guardian and the other for the minor, have to be provided with the account opening form. All the signatures on the account opening and KYC forms have to be made by the guardian.

2)Proof of Identity–POI:

a)PAN Card of the guardian and the minor is to be compulsorily provided.

b)Any other applicable PoI document like Aadhar Card, Passport, Voting Card, Driving License has to be submitted for both guardian and the minor.

3)Proof of Address–POA: Applicable PoA documents from among Aadhar Card, Ration Card, Registered Lease or Sale agreement of residence, Utility bills, etc. have to be provided.

4)Birth Certificate of the minor has to be provided.

5) Bank account details of the guardian, where the minor is a joint holder, is required. A separate bank account of the minor is not necessary.

6) In case of a legal guardian, the respective court order appointing the person as the guardian of the minor.

Once, all the documents are submitted to the depository participant (broker), he opens the account in the name of the minor. It is important to remember that the minor demat account neither is nor can be, opened as a joint account.

The minor does not have any tax implications from the earnings made through the demat account. The minor’s income is added to either parent’s income (whoever’s income is more) or the guardian’s income.

A parent can be the guardian to the demat accounts of all of his or her children.

A minor demat account allows trading in Equity deliveries. A minor, through his guardian and demat account, can also apply to IPO and buyback offers.

If the guardian of a minor’s demat account dies, the account is labeled frozen, and all transactions are stopped till a new guardian submits a duly completed fresh KYC form. All the KYC documents including Identity proof, address proof, bank account details, etc. have to be provided along with the original death certificate of the deceased guardian. The copy of the court order, in case a legal guardian is appointed, should also be submitted.