Difference Between Individual and HUF Demat Accounts
- 20th February 2026
- 01:30 PM
- 7 min read
An individual Demat account lets you invest in securities such as stocks, mutual funds, ETFs, bonds and more in a digital format with a single ownership. A HUF Demat account is designed for Hindu Undivided families (HUFs) to let them collectively or jointly invest in securities and hold those in a dematerialised format.
As of FY26, in India, there are 21 crore (210 million) Demat accounts registered, including both individual and HUF Demats.
As an investor, to shape your investment journey, you must learn the difference between individual and HUF Demat accounts and choose one that meets your investment purpose.
What Does an Individual Demat Account Mean?
As per the SEBI regulation in 1996 to invest in securities of the stock market, as an individual investor, you must first create a Demat account to securely store your security certificates in it digitally.
Focusing on its purpose, further, an individual Demat account lets sole investors potentially grow their wealth through investments in assets in the Indian stock market, mutual funds, etc. Thus, when you participate in investments, you can hold bought securities like company shares, ETFs, mutual funds and other financial assets in a Demat account and manage them digitally.
To open a Demat account, you must be 18 years of age, with valid identification and address verification documents. You can open an individual Demat account with the Depository Participants or DP such as stockbrokers, banks and other financial institutions.
Upon creating a Demat account, you obtain a 16-digit Demat account ID or BO ID that acts as a unique identifier of your account.
What is a HUF Demat Account?
As its name implies, a HUF Demat account is to allow HUF,s i.e. a legal entity as per the Indian Income Tax of 1961, to participate in investment activities. Typically owned by Hindu, Sikh, Jain and Buddhist families of India, the ‘Karta’ or the head of this account type manages it.
Unlike the individual Demat account, one of the key difference between individual and HUF Demat accounts is that a HUF must provide a HUF PAN along with individual identification proof of the Karta and other family members.
This type of account is usually suitable for families that are seeking to pool investment amounts and manage them collectively. While a HUF builds with a HUF Demat account, they also enjoy tax benefits as per the Indian tax norms.
Similar to an individual Demat account, a HUF can open this type of Demat account with SEBI-registered brokers like thePL Capital Group – Prabhudas Lilladher.
With PL, create a Demat and a trading account for free and start investing in stocks, IPOs, ERTFs, mutual funds, gold bonds and more. Download the PL Capital app to begin your investment journey!
Difference Between Individual and HUF Demat Accounts
Here are 7 key differences between the individual vs HUF Demat accounts that you must note to understand their differences based on different parameters:
| Parameters | Individual Demat Account | HUF Demat Account |
| Ownership and Control | As its name suggests, with an individual Demat, you can manage your investments by yourself. Here, you have a single ownership of your bought securities. | The ‘Karta’ or the head of a HUF manages this type of account. However, all HUF members are joint owners of the assets in this Demat type, making their ownership collective. |
| Eligibility and Account Opening | Individuals, upon reaching 18 years of age, can open a Demat account with a valid PAN card. DPs or brokers might ask for additional documents to open an individual Demat account. | A HUF must have a valid HUF PAN card. Also, the Karta or the head and the adult coparcener might need to produce their PANs and other documents to open a HUF Demat. |
| Purpose of Investment | Investors usually choose an individual Demat account to grow personal wealth. It involves individually trading in stocks, investments in mutual funds and more. | HUFs create this account to preserve and grow family or legacy wealth along with efficient asset management. |
| Tax Treatment | Individuals holding a Demat account are liable for LTCG and STCG taxes. The amount depends on asset types and other income from securities and you must mention them accordingly while filing their Income Tax Returns. | The Indian Income Tax norms consider gains of HUFs from investment as a single taxable entity and impose taxes accordingly. |
| Tax Benefits | Personal tax exemptions apply. For example, as an individual Demat account holder, you get an exemption of INR 1.25 lakh on your long-term gains from equity investments. | By opting for the old tax regime, a HUF can enjoy its own basic exemption of INR 2.5 lakh. HUFs can take advantage of other deductions, reducing the overall tax burden on the family members. |
| Maintenance, Charges | Brokers or DPs impose an Annual Maintenance Charge or AMC. This charge on individual Demat accounts ranges between INR 300 and INR 750 with GST. | Brokers typically impose a similar charge to individual Demats. However, it might be higher due to additional reporting, KYC and other requirements. |
| Compliance | As an individual Demat account holder, you must file your Income Tax Return on your gains from investments individually. | HUFs must file the income tax under their name. Also, HUFs must update their DPs with new personal information if coparceners change. |
Conclusion
As an investor, you must learn the difference between individual and HUF Demat accounts to choose one that meets your investment requirements. If you want to grow your financial future through investment by yourself, you may opt for an individual Demat account. Otherwise, if you are a part of an HUF, looking for collective financial growth, tax benefits, and more, create a HUF Demat account with proper documentation.
With PL, explore company stocks, mutual funds, ETFs and more on the PL Capital app, invest in them and grow your money. Download the PL Capital app today!
FAQs on Individual vs HUF Demat Accounts
1. Can I have both an individual and an HUF demat account?
Yes, you can have your own or individual Demat account and create an HUF Demat account simultaneously. However, note that you must have an HUF PAN to create a HUF Demat. As an individual, provide your PAN for a Demat account for yourself.
2. Who operates and manages a HUF demat account?
The ‘Karta’ or the head of an HUF is usually in charge of operating and managing a HUF Demat account. Although the head of the family can manage the account, all members of the same HUF are the joint holders of the assets of that account.
3. Are tax benefits different for HUF and individual demat accounts?
Yes, a HUF can enjoy an extended benefit with a HUF Demat account compared to an individual Demat account. Especially, if an HUF opts for the old tax regime, it can enjoy basic tax exemptions. It is up to INR 2.5 lakh along with additional deductions under different sections of the Income Tax Act. It reduces the overall tax burden on the family members.
4. Can a HUF demat account be used for trading and investments?
Yes, similar to an individual Demat, a HUF can open a HUF Demat account. They can open one with a broker or DP and invest in mutual funds, bonds, etc. They can also invest or trade in stocks and accumulate wealth for an entire family.
