Zerodha resident individual account

Zerodha resident individual account is the standard trading and demat account opened by Zerodha for individual residents of India under the SEBI (Stock Brokers and Sub-brokers) Regulations, 1992. It is the most common account type on the Kite platform and serves as the reference account against which all other Zerodha account variants are defined. The account combines a trading account (held with Zerodha Broking Limited) and a demat account (held with either CDSL or NSDL) under a single onboarding workflow.

As of 2024, Zerodha held approximately 6.5 million active clients, the majority of whom held resident individual accounts. The account grants access to equity delivery, equity intraday, equity futures and options, currency derivatives, and commodity derivatives on recognised Indian exchanges, subject to the client activating the relevant segments.

Eligibility and documentation

Eligibility criteria

To open a resident individual account at Zerodha, the applicant must satisfy all of the following conditions:

• Be a citizen of India or a person of Indian origin who is a tax resident of India under the provisions of the Income Tax Act, 1961 (section 6).
• Be aged 18 years or above at the time of application. Minors may open a Zerodha minor demat account under a guardian.
• Hold a valid Permanent Account Number (PAN) issued by the Income Tax Department.
• Hold an Aadhaar number linked to a valid mobile number, enabling electronic KYC (eKYC) via the Aadhaar-based OTP channel or DigiLocker.
• Maintain an active savings bank account in an Indian bank from which the Zerodha trading account can receive and disburse funds.

Non-resident Indians, Overseas Citizens of India, and foreign nationals are not eligible for a resident individual account. They must instead apply through the Zerodha NRI PIS account or Zerodha NRI non-PIS account pathway depending on their repatriation requirements.

Documentation required

The following documents are required:

Income proof is mandatory for activation of the equity futures and options (F&O) segment, currency derivatives, and commodity derivatives. For equity delivery and equity intraday, no income proof is required.

Regulatory wrapper

The Zerodha resident individual account operates under the following primary regulatory instruments:

SEBI (Stock Brokers and Sub-brokers) Regulations, 1992, govern the registration, conduct, and obligations of Zerodha Broking Limited as a SEBI-registered stock broker (registration number INZ000031633). Zerodha is a member of NSE, BSE, MCX, and other exchanges under this registration.

SEBI (Depositories and Participants) Regulations, 2018, govern the demat account held with CDSL or NSDL. Zerodha acts as a depository participant (DP) registered with both depositories. The DP ID and client ID together form the 16-digit beneficiary owner (BO) ID used for securities settlement.

SEBI (KYC Registration Agency) Regulations, 2011 and SEBI master circular on KYC, mandate the know-your-customer process, including the use of a KYC Registration Agency (KRA) such as CVL-KRA, NDML-KRA, or CAMS-KRA. Records verified by Zerodha are uploaded to the relevant KRA and are portable to other SEBI-regulated intermediaries.

Prevention of Money Laundering Act, 2002 (PMLA) and SEBI master circular on Anti-Money Laundering, require Zerodha to conduct client due diligence, maintain records, and report suspicious transactions to the Financial Intelligence Unit-India (FIU-IND).

Depositories Act, 1996, provides the statutory basis for holding securities in electronic form. The resident individual becomes a beneficial owner of dematerialised securities, with the depository (CDSL or NSDL) as the registered owner in law.

KYC process

Online (eKYC) pathway

Zerodha processes the majority of resident individual accounts through its fully online eKYC workflow:

1. Application initiation, The applicant visits Zerodha’s account-opening portal and enters PAN and date of birth.
2. Aadhaar OTP verification, UIDAI’s OTP-based eKYC API is used to pre-fill name, date of birth, and address from the Aadhaar database. This constitutes a CKYC-compliant digital KYC.
3. DigiLocker alternative, Applicants who prefer not to share Aadhaar OTP may link DigiLocker to fetch a digitally signed Aadhaar XML instead.
4. Bank account verification, A penny-drop (sub-rupee IMPS credit) is used to verify the applicant’s bank account ownership in real time.
5. Segment selection and income proof upload, The applicant selects trading segments. If F&O, currency, or commodity is selected, income proof is uploaded.
6. e-Sign via Aadhaar, The account-opening form is electronically signed using Aadhaar-based e-Sign under the Information Technology (Amendment) Act, 2008, and the e-Sign framework notified by the Ministry of Electronics and Information Technology.
7. In-person verification (IPV) through video, SEBI mandates IPV for all new accounts. Zerodha conducts this via a short live video call where the applicant holds the PAN card and a randomly generated OTP. Alternatively, a pre-recorded video with a handwritten OTP is accepted in some cases.

Offline pathway

Applicants without an Aadhaar-linked mobile number, or those with OTP delivery issues, may submit a physical KYC form with self-attested copies of documents. Physical applications are processed at Zerodha’s registered office in Bengaluru.

KYC portability

Once a client’s KYC is verified and uploaded to a KRA, subsequent account openings with other SEBI-registered intermediaries do not require fresh documentation, the existing KYC record is fetched from the KRA and confirmed by the new entity.

Segments available

A resident individual account provides access to the following exchange segments upon activation:

Zerodha does not offer trading in government securities (G-Secs) through Kite directly; access is through the RBI Retail Direct portal separately.

Account opening fees and ongoing charges

One-time fees

Annual maintenance charges (AMC)

The demat AMC is waived for the first year for accounts opened through certain promotional campaigns. Accounts with holdings below the SEBI-mandated threshold for a Basic Services Demat Account (BSDA) may qualify for reduced AMC under the BSDA framework.

Brokerage

Zerodha operates on a flat-fee brokerage model:

Statutory charges, Securities Transaction Tax (STT), exchange transaction charges, SEBI turnover fees, GST, and stamp duty, are additional and are governed by the respective statutory instruments.

Tax treatment

Capital gains

Short-term capital gains (STCG), Securities held for 12 months or less at the time of sale are taxed as short-term capital gains. As of the Finance Act, 2024, STCG on listed equity and equity-oriented mutual funds (where STT is paid) is taxed at 20 per cent. STCG on other listed securities is taxed at the applicable income tax slab rate.

Long-term capital gains (LTCG), Securities held for more than 12 months. LTCG on listed equity and equity-oriented mutual funds exceeding INR 1.25 lakh per financial year is taxed at 12.5 per cent without the benefit of indexation, under section 112A of the Income Tax Act, 1961, as amended by the Finance Act, 2024. Gains up to INR 1.25 lakh are exempt.

The grandfathering rule under section 112A protects unrealised gains as of 31 January 2018.

Dividend taxation

Dividends received from Indian companies are added to the investor’s total income and taxed at the applicable income tax slab rate. Companies deduct TDS at 10 per cent on dividends exceeding INR 5,000 in a financial year (section 194 of the Income Tax Act).

F&O income

Profits from equity futures and options are treated as business income under the Income Tax Act and are subject to slab rates. F&O income is non-speculative business income; losses can be set off against any business income and carried forward for eight assessment years.

Advance tax

Clients whose estimated tax liability exceeds INR 10,000 in a financial year are required to pay advance tax in four instalments under section 208 of the Income Tax Act. Zerodha provides capital gains statements and tax P&L reports through Zerodha Console to facilitate this computation.

Operational considerations

Fund addition and withdrawal

Funds are added to the trading account via:

• UPI (up to INR 1 lakh per transaction for most UPI handles; NPCI mandates vary by bank)
• Net banking IMPS/NEFT/RTGS (no upper limit)
• NEFT/RTGS for large amounts

Withdrawal requests submitted before the cut-off time are processed to the linked bank account within one working day under SEBI’s guidelines on settlement of client funds.

Securities settlement

India follows a T+1 settlement cycle for equity markets (effective phased rollout from January 2023, and universally for NSE from January 2024). Under T+1, shares purchased appear in the demat account the following business day. Shares sold are blocked in the demat account on trade date and transferred to the exchange’s clearing pool on T+1.

Nomination

SEBI mandates that all individual demat and trading account holders either register a nominee or explicitly opt out of nomination in writing. Zerodha allows nomination through the demat account settings on the Zerodha Console. Up to three nominees may be registered with fractional allocation.

Power of attorney (POA)

Historically, Zerodha required clients to execute a limited POA to enable seamless debit of securities from the demat account for settlement. Following SEBI’s circular on eliminating POA abuse (SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655, dated 3 November 2021), Zerodha adopted the TPIN-based CDSL Easiest authorisation mechanism for demat debits, eliminating the mandatory POA requirement. Clients may still opt for a POA, but it is not compulsory.

Pledging for margin

Clients may pledge equity holdings as margin for F&O trading. The pledge is created through CDSL or NSDL, and the margin is credited to the trading account after a haircut (determined by the exchange’s risk management framework). Pledging does not transfer ownership; the securities remain in the client’s demat account.

Account freezing and closure

• Accounts with no transactions for 12 months are classified as inactive. Zerodha sends a notice and re-activates the account upon client request.
• Accounts with no transactions for 24 months may be frozen. Reactivation requires fresh KYC confirmation.
• Account closure requires a written request (online via Console or physical letter), nil balance in the trading account, and transfer or re-materialisation of all demat holdings.

Platform access and order types

The resident individual account provides access to Zerodha’s full suite of trading platforms:

• Kite, The primary web and mobile trading platform. Kite supports all exchange segments, advanced charting, and order types including limit, market, stop-loss limit (SL), and stop-loss market (SL-M). Intraday product types (MIS, Margin Intraday Square-off) and delivery product types (CNC, Cash and Carry) are selectable at order entry.
• Zerodha Console, The back-office and reporting platform for tax P&L statements, capital gains reports, contract notes, fund statements, and demat holding details.
• Zerodha Coin, The direct mutual fund investment platform, accessible from the Kite app and the Coin web portal. SIP mandates, lump-sum investments, and redemptions in direct plans of SEBI-registered mutual fund schemes are processed through Coin.
• Zerodha Smallcase, An integration with the Smallcase platform, allowing clients to invest in curated baskets of stocks or ETFs through their Zerodha account.
• Sensibull, Streak, and third-party tools, Zerodha’s marketplace hosts third-party F&O analytics tools (Sensibull for options strategy builder, Streak for algo strategy creation) that connect directly to the Zerodha trading account via API.

Order types available

Margin and leverage

SEBI’s margin framework (SEBI circular SEBI/HO/MRD2/DCAP/CIR/P/2021/12, dated 20 January 2021, and subsequent circulars on margin collection) governs the margins required for equity intraday and F&O positions. Key features for resident individual accounts:

• SPAN + Exposure margin, For F&O positions; computed by the exchange’s risk management system.
• VaR + ELM margin, For equity delivery positions in margin trading facility (MTF).
• Peak margin reporting, Brokers are required to report intraday peak margin usage to exchanges; insufficient margin at any intraday snapshot can lead to a margin shortfall penalty.
• Margin Trading Facility (MTF), Zerodha offers MTF under SEBI’s guidelines, allowing clients to purchase delivery equity shares with borrowed funds up to the prescribed leverage. MTF carries an interest charge (approximately 0.049 per cent per day at Zerodha as of 2024).

Account-level risk management

Zerodha operates a risk management system (RMS) that continuously monitors open positions and available margin. For resident individual accounts:

• Auto square-off, If the margin in the account falls below the required level due to market movement, Zerodha’s RMS may automatically close (square off) open positions to bring the account back to a margin-compliant state. This typically occurs at 15:15 IST for MIS intraday positions.
• Kill switch, Clients may activate a kill switch via the Console, which blocks all new order placement for a specified period (used for self-imposed trading halts).
• Position limits, Exchange-level position limits for stock F&O apply; Zerodha’s RMS enforces these at the client level.

Grievance redressal

Resident individual account holders may escalate unresolved complaints through the following channels:

1. Zerodha’s internal grievance cell, First point of contact via support.zerodha.com.
2. SEBI SCORES, The SEBI Complaints Redress System (SCORES) at scores.gov.in; complaints must be filed within 3 years of the event.
3. Exchange grievance mechanism, NSE and BSE have their own investor grievance redressal cells.
4. SEBI/Exchange arbitration, For disputes exceeding INR 25 lakh or involving complex matters; arbitration is conducted under the exchange’s arbitration rules.
5. Smart ODR, SEBI’s Online Dispute Resolution (ODR) platform introduced in 2023 (SEBI/HO/OIAE/IGRD/CIR/2023/135, dated 4 August 2023) provides a technology-mediated conciliation and arbitration mechanism.

Comparison with other Zerodha account types

References

1. SEBI (Stock Brokers and Sub-brokers) Regulations, 1992, as amended.
2. SEBI Master Circular on Know Your Customer (KYC) norms for the securities market, SEBI/HO/MIRSD/MIRSD-PoD-1/P/CIR/2023/37, dated 8 March 2023.
3. SEBI circular on T+1 settlement cycle, SEBI/HO/MRD2/DCAP/CIR/P/2021/702, dated 7 September 2021.
4. SEBI circular on TPIN-based demat debit authorisation, SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/655, dated 3 November 2021.
5. Depositories Act, 1996.
6. SEBI (Depositories and Participants) Regulations, 2018.
7. Income Tax Act, 1961, sections 45, 48, 112A, 194, 208.
8. Finance Act, 2024, amendments to STCG and LTCG rates.
9. Prevention of Money Laundering Act, 2002.
10. SEBI (KYC Registration Agency) Regulations, 2011.