The Securities and Exchange Board of India (SEBI) and the Income Tax Department have jointly announced that holding a valid Permanent Account Number (PAN) is now mandatory for all Demat account holders. This regulation has been introduced to enhance transparency, prevent tax evasion, and ensure consistency in financial records across trading and investment platforms. The new requirement aims to strengthen the verification process for individuals and entities engaged in the stock market and other securities-related transactions.

Under the revised norms, all investors must link their PAN with their Demat accounts maintained with depositories like NSDL and CDSL. This rule applies to both existing and new account holders. Failure to comply with the directive may result in the suspension of the Demat account, restricting the ability to buy, sell, or transfer securities. The regulatory bodies have emphasized that a valid PAN is essential for maintaining KYC compliance and conducting any capital market transaction.

Investors are advised to ensure that their PAN details are updated with their Depository Participant (DP) and match exactly with those on record with the Income Tax Department. Discrepancies in PAN, name spelling, or date of birth may lead to technical issues and rejection of transactions. Authorities have also warned that non-compliance beyond the stipulated deadline could attract penalties or account deactivation, urging all Demat account holders to act promptly.