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Who is a Politically Exposed Person (PEP) and why must they submit income proof to open an account with Zerodha?

Politically Exposed Persons (PEP) are individuals who are or have been entrusted with prominent public functions in a foreign country, heads of state or of governments, senior politicians, senior government, judicial, military officers, senior executives of state-owned corporations, important political party officials, etc.

While opening an account, it is mandatory to declare the PEP status to the regulator and the exchanges. Clients must select Yes or No to the question Are you a politically exposed person? Select Related to one, if a close relative is a PEP. To learn how to open an account online, see How to open a Zerodha account online?

PEP clients must explain their source of wealth and political affiliation, including their name, political party, constituency, and the name of the politician.

PEPs must submit income proof while opening an account due to their classification as Clients of Special Category (CSC). To learn more, see Who are Clients of Special Category (CSC), and when must they provide income proof?

The income proof can be one of the following:

  • Bank statement for the last six months with an average balance of more than ₹10,000.
  • The latest salary slip with gross monthly income exceeding ₹15,000.
  • ITR acknowledgement with gross annual income exceeding ₹1,20,000.
  • Form 16 with gross annual income exceeding ₹1,20,000.
  • Certificate of net worth more than ₹10,00,000.
  • Statement of demat holdings with current holdings value exceeding ₹10,000.

Did you know? If the account was opened before the PEP status changed. It can be updated online. To learn how, see Why did Zerodha send an email requesting KYC details to be updated?