_____________ is a mandatory document for opening DEMAT account.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → PAN number
Option (1) AADHAR card — Incorrect. An Aadhaar card is a proof of identity and address, but it is not the one document named as compulsory for trading in securities.
Option (2) PAN number — Correct. To trade in shares, an investor first registers with a broker and opens a trading account, and then opens a demat account with a depository participant to hold the shares in electronic form. Among the details the investor must give, the PAN number (Permanent Account Number, issued by the Income Tax Department) is the one marked mandatory. It links every deal in securities to the investor for tax purposes.
Option (3) Driving license — Incorrect. A driving licence can prove identity, but it is not compulsory for opening the account.
Option (4) Voter ID card — Incorrect. Like the driving licence, it is only a proof of identity, not the compulsory document.
Note: Although the chapter ‘Financial Markets’ was dropped from the NCERT textbooks during rationalisation, it has stayed in the NTA syllabus every year since 2022, except for 2025, and it is part of the syllabus again from 2026. This question is therefore based on the pre-rationalised NCERT, an extract from which is given below. This chapter moved out of the NCERT but kept a room in the CUET paper. A few pages of the pre-rationalised book are easy marks.
NCERT (Pre-rationalised Edition): “Steps in the Trading and Settlement Procedure … 1. If an investor wishes to buy or sell any security he has to first approach a registered broker or sub-broker and enter into an agreement with him. The investor has to sign a broker-client agreement and a client registration form before placing an order to buy or sell securities. He has also to provide certain other details and information. These include: |