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Learn the specific scenarios in which opening a demat account without a PAN card is allowed and understand the associated eligibility, documents, and restrictions.
A demat account is essential for trading or investing in Indian stock markets, and a PAN card is one of the key documents typically required for opening one. However, certain investor categories and situations are exempted from this requirement under SEBI guidelines. These exceptions exist to make capital market access more inclusive. In this article, we explain who can open a demat account without a PAN card, the alternative documents required, and the limitations involved.
In general, the Securities and Exchange Board of India (SEBI) mandates the submission of a valid PAN card for opening a demat account. This is to ensure compliance with Know Your Customer (KYC) norms, taxation, and traceability of transactions. However, specific exemptions are provided for certain categories of investors and under unique circumstances, as explained in the next section.
Only a limited set of individuals and institutions qualify to open a demat account without a PAN. These exemptions are granted under specific regulatory provisions:
Individuals from Scheduled Tribes (ST) residing in states such as Arunachal Pradesh, Manipur, Mizoram, Nagaland, Tripura, parts of Assam, and Sikkim are allowed to open demat accounts without PAN. The investment value must not exceed ₹50,000 at any point.
Minors are not eligible to hold a PAN card independently. In such cases, a demat account can be opened in the name of the minor using the PAN card of their legal guardian. The guardian manages the account on behalf of the minor until they attain majority.
Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), and some foreign nationals may be permitted to open demat accounts using alternative documents like passports, OCI/PIO cards, and overseas address proof. The broker must be registered to offer such facilities and comply with FEMA regulations.
Certain institutional and government entities such as recognised UN bodies, multilateral agencies, or tax-exempt organisations may be allowed to open demat accounts without a PAN card, subject to compliance with specific conditions laid out by regulators.
Investors who do not possess a PAN card can, in some cases, submit Form 60 along with valid identity and address proofs. However, this method comes with usage limitations and may not be accepted by all depository participants (DPs).
Depending on the exemption category, alternate documentation must be provided. Below is a general outline of accepted substitutes:
| Investor Type | Documents Required |
|---|---|
Minor |
Guardian’s PAN, minor’s birth certificate, Aadhaar of minor and guardian |
ST Resident (NE States) |
Address proof, ST certificate, Aadhaar |
NRI/PIO/Foreign National |
Passport, PIO/OCI card, overseas address proof, FEMA declaration |
Institutional Entities |
Registration certificates, authorisation documents, compliance with regulatory norms |
Form 60 Users |
Duly filled Form 60, valid photo ID, address proof |
Each depository participant may request additional documentation depending on their internal compliance processes.
For eligible individuals and entities, here’s how to proceed:
Find a SEBI-registered DP or broker that allows demat account opening under PAN exemptions. Not all platforms offer this facility.
Prepare all substitute documents based on your eligibility — including guardian documents for minors or residency proof for NE region ST applicants.
You’ll be required to undergo KYC verification. Some DPs may allow eKYC, while others may mandate physical or video-based verification.
Fill in the demat account application form online or offline, attach supporting documents, and submit for review.
Upon verification, your demat account will be activated. You will receive the account details via email or SMS from the DP.
While exemptions exist, they come with several restrictions that investors must consider:
Holding Limits: For example, ST investors from NE states cannot exceed ₹50,000 in holdings.
Transaction Restrictions: Some accounts may not be allowed to apply for IPOs or trade in the derivatives segment.
Limited Services: Features such as margin trading or linking to trading platforms may be disabled until PAN is submitted.
Eventual PAN Submission: In many cases, the PAN will need to be provided later to maintain the account’s operational status.
These accounts are treated as provisional or special-case facilities under regulations.
Despite limitations, these exemptions aim to improve financial inclusivity:
Enables participation from underserved regions and individuals
Helps minors and NRIs start participating in investments at an early stage
Supports global entities in managing Indian investments legally
However, all such benefits must be weighed against regulatory limitations and eventual PAN submission requirements.
Opening a demat account without a PAN card is not the norm in India, but regulatory provisions do allow it under specific, limited circumstances. Individuals from North-Eastern Scheduled Tribes, minors, NRIs, and recognised institutions may use alternative documents to begin investing. Investors who fall under these categories must ensure they understand the documentation, holding limits, and service restrictions applicable to such accounts
This content is for informational purposes only and the same should not be construed as investment advice. Bajaj Finserv Direct Limited shall not be liable or responsible for any investment decision that you may take based on this content.
A demat account in India can be opened without a Permanent Account Number (PAN) only in specific cases, such as for minors, certain Non-Resident Indians (NRIs), and Scheduled Tribe (ST) residents from select North-Eastern states, as permitted under SEBI regulations.
Form 60 is a declaration submitted by individuals who do not possess a PAN card, and it is accepted along with supporting identity documents to complete the Know Your Customer (KYC) process while opening a demat account.
A PAN-exempt demat account can be converted into a regular demat account once the account holder obtains a valid PAN and updates the details with the Depository Participant (DP).
Demat accounts opened without PAN generally come with restrictions such as limited trading features, lower transaction limits, and restrictions on derivative trading or high-value transactions.
Not all brokers permit demat account opening without PAN. Only SEBI-registered Depository Participants (DPs) that support specific exemptions are authorised to facilitate such accounts.
