How to open a demat or trading account for a minor Its also known as a custodial account
Q.Can a demat account be opened for a minor?Since there is no age restriction for having a demat account, it can be opened in a minor’s name by his parent or legal guardian. Technically, the account is in the minor’s name, but it is managed and operated by the parent or guardian. Also, the minor can’t be a joint holder along with his parent or guardian.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
Q.Can a trading account be opened for a minor?
Minors cannot directly trade or open a trading account, but a parent or legal guardian can open it on behalf of the minor. It’s also known as a custodial account.
Q.What kind of trading is allowed in such accounts?
Since a minor cannot enter into a contract with a stockbroker to buy or sell securities, or conduct financial transactions, the account can be opened only for selling securities possessed by the minor through an investment in an IPO, inheritance, corporate action, or market transfers. Only equity can be bought or sold through this account, and no intra-day trading, currency or derivative trading is allowed.
Web Development
Java 21 Essentials for Beginners: Build Strong Programming Foundations
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Java Programming with ChatGPT: Learn using Generative AI
By - Metla Sudha Sekhar, IT Specialist and Developer
Data Science
SQL for Data Science along with Data Analytics and Data Visualization
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
Tabnine AI Masterclass: Optimize Your Coding Efficiency
By - Metla Sudha Sekhar, IT Specialist and Developer
Web Development
Advanced C++ Mastery: OOPs and Template Techniques
By - Metla Sudha Sekhar, IT Specialist and Developer
Office Productivity
Mastering Google Sheets: Unleash the Power of Excel and Advance Analysis
By - Metla Sudha Sekhar, IT Specialist and Developer
Web Development
JavaScript Essentials: Unlock AI-Driven Insights with ChatGPT
By - Metla Sudha Sekhar, IT Specialist and Developer
Web Development
Django & PostgreSQL Mastery: Build Professional Web Applications
By - Metla Sudha Sekhar, IT Specialist and Developer
Web Development
Intermediate C++ Skills: Master Pointers, Structures and File Stream
By - Metla Sudha Sekhar, IT Specialist and Developer
Finance
Financial Literacy for Non-Finance Executives
By - CA Raja, Chartered Accountant | Financial Management Educator | Former AVP - Credit, SBI
Leadership
Business Storytelling Masterclass
By - Ameen Haque, Founder of Storywallahs
Web Development
Advanced Java Mastery: Object-Oriented Programming Techniques
By - Metla Sudha Sekhar, IT Specialist and Developer
Office Productivity
Advanced Excel Course - Financial Calculations & Excel Made Easy
By - Anirudh Saraf, Founder- Saraf A & Associates, Chartered Accountant
Web Development
Intermediate Java Mastery: Method, Collections, and Beyond
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Digital marketing - Wordpress Website Development
By - Shraddha Somani, Digital Marketing Trainer, Consultant, Strategiest and Subject Matter expert
Web Development
Master RESTful APIs with Python and Django REST Framework: Web API Development
By - Metla Sudha Sekhar, IT Specialist and Developer
Marketing
Digital Marketing Masterclass by Pam Moore
By - Pam Moore, Digital Transformation and Social Media Expert
Data Science
SQL Server Bootcamp 2024: Transform from Beginner to Pro
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
ChatGPT Mastery from Zero to Hero: The Complete AI Course
By - Metla Sudha Sekhar, IT Specialist and Developer
Artificial Intelligence(AI)
AI and Analytics based Business Strategy
By - Tanusree De, Managing Director- Accenture Technology Lead, Trustworthy AI Center of Excellence: ATCI
Artificial Intelligence(AI)
Basics of Generative AI: Unveiling Tomorrow's Innovations
By - Metla Sudha Sekhar, IT Specialist and Developer
Q.What happens when the minor turns 18?
The existing account can be converted into a regular account when the child turns 18, but a new account opening form has to be submitted along with the required documents.
Q.What is the tax liability for a minor’s demat/ trading account?
If a minor’s account earns income by way of capital gains, it will be clubbed with the income of the parent who earns more under Section 64 (1A), and will be taxed at his slab rate. The parent can claim an exemption of up to Rs.1,500 per child on the clubbed income under the old tax regime.
Q.Where can the accounts be opened?
The accounts can be opened with a depository participant (DP) or stockbroker who is registered with the Central Depository Services Limited (CDSL) or the National Securities Depository Limited (NSDL). Most brokers and online broking platforms offer a comprehensive demat-cumtrading account for minors.
#sr_widget.onDemand p, #stock_pro.onDemand p{font-size: 14px;line-height: 1.28;} .onDemand .live_stock{left:17px;padding:1px 3px 1px 5px;font-size:12px;font-weight:600;line-height:18px;top:9px} #sr_widget.onDemand .sr_desc{margin:0 auto 0;} #sr_widget.onDemand .sr_desc{color: #024d99;margin-top:10px;} #sr_widget.onDemand .crypto .live_stock .lb-icon{8px 6px 5px 3px !important} #sr_widget.crypto.onDemand a.text{border-bottom:1px solid #ccc;padding-bottom:5px;display:block;width:100%} #sr_widget.onDemand .sr_desc .text p, #stock_pro.onDemand .sr_desc .text p{font-size:12px;font-weight:400;}
This story originally appeared on: India Times - Author:Faqs of Insurances