Reduced risk of loss of documents - Chances of losing documents are high
in physical form. The shares can even get misplaced if you face any natural
disaster that compels you to shift. Hence, storing shares in an online format is a
far better and safe option as it enables you to have a permanent digital record of
your share.
Avoiding forgery - In the case of physical shares or bonds, the risk of fraud is
high. But when it comes to operating a paperless demat account, you have all the
necessary details and authentic data in your record, thereby avoiding forgery or
impersonation.
Time Saver - The time taken for buying and selling shares using a Demat A/c is
minimal. Hence, the liquidity of shares is easier in this case. On the other hand,
transferring physical shares was a lengthy process. Online transactions are
processed in a jiffy because the securities are stored in a dematerialised form.
Easy Tracking - Another benefit that you can avail yourself of while you open
Demat account are that the number of physical documents is nil. It invariably
reduces efforts to keep track of each of them. Therefore, you do not need to
maintain a record manually. All your documents are safely held along with the
record of each investment.
No TDS on Demat Securities - One of the issues taxpayer's faces is TDS or
Tax Deduction at Source. Nonetheless, the CBDT- Central Board of Direct Taxes
has granted dispensation from TDS when a Demat account holder makes
payments from his account. Additionally, no TDS is deducted from the interest that you receive on your bonds and securities. For exemption from TDS, make sure
you save your securities in the Demat mode, and they are listed on NSE and BSE.
Global Investment - Globalisation is significantly encouraged with the
proliferation of Demat accounts. Foreign investors are given easy access to the
Indian stock market through these accounts, thereby benefitting the economy of
India.
