A demat account is opened for holding the stocks you own in digital form. Linked to a trading account online, a demat account serves the purpose of keeping your stocks in a systematic way in one place. Along the same lines, the Indian government proposed a demat account for land titles with a view to eliminating the dubious issues surrounding land deals, unclear titles and a lack of transparency therein. All this has led to, and still continues to lead to, litigation. This acts as a curb to the progress of the Indian economy in general. Anyway, just as Indian citizens can open a demat account to hold securities, so can NRIs, and this may be true for a land demat account should a proposal be executed as such.
Open a Demat Account
Both Indian residents and NRIs or non-resident Indians can open a demat account in India. A demat account enables the demat account holder to hold securities in digital formats. Since dematerialisation came about, India has witnessed a significant degree of economic growth, as time and effort is saved on a massive scale. Online, trading takes place with ease, as securities are held online too. An online demat account, thus facilitates the storage of securities in a systematic manner, for both resident Indians and NRIs.
Demat Accounts for Real Estate
While an NRI demat account is easy to open, as long as certain laws and regulations are adhered to, a demat account for real estate in India is still in the making. To give a substantial boost to the Indian economy, and to get rid of disputes commonly occurring due to real estate, a demat account for real estate has been proposed. In this scheme, any immovable properties owned by an individual, including warehouses and commercial property, would be accounted for by records in a demat account. Thus, a demat account for land deeds will hold all your property titles. The advantages of this are manifold:
- A regulatory entity keeps records and holds accounts of transactions in one place.
- As a result of an official record of properties owned by an individual, transparent dealings are encouraged and properties in false ownership titles cannot be recorded, putting an end to ‘benami’ (falsely titled) properties.
- Transfers of property would have to be completely transparent and corruption would be a thing of the past.
NRIs and Real Estate
NRIs are legally permitted to invest in real estate in India, and these transactions are regulated by the Foreign Exchange Management Act or FEMA. If the proposal for real estate demat accounts was to be formalized, then NRIs may also be permitted to hold a demat account for land.
Clarity and Convenience
In future, if an individual is able to open a demat account for land, the immediate impact would be the guarantee of ownership of a clear and assured title. While land records are gradually being digitized, a demat account for land may be a bit far off. Still, that shouldn’t stop you from opening a demat account for trading securities with Motilal Oswal, the most trusted Indian broker today.
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