Demat

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 June 2012 My question is that,i want to open a DEMAT account and my friends and relatives want to trade in my account itself since they dont want to open a new account right now but problem is that one of my uncles told me that it creates a problem in future from income tax department because they will ask how you traded all these transactions and what is the source like that he warned me. But as i think trading in demat is completely legal and white.So please suggest me really it creates a problem as my uncle told or i can proceed please solve my problem.Whether i have to allow them to trade in my account or not.

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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02 June 2012 The persons who want to trade through your account have consulted with their respective uncles who all advised their nephews not to open a Demat A/c in their own names as the transactions in demat account may be questioned by ITD.
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Like your uncle, those uncles are also experienced and matured.
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A Demat Account in your name can not be used by others like other personal objects.
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In spite of allowing them to operate through your account , you may help such persons in opening a Demat A/c in their respective names.
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