Yes,to open a demat account, you need a PAN Card. This is according to the SEBI circular DoP/Cir-05/2007 dated April 27, 2007. To open a demat account, regardless of investment size or goals, one must submit the PAN Card.
Schedule tribes from Northeast (Arunachal Pradesh and Mizoram, Nagaland Manipur, Tripura, Tripura, and certain areas of North Chachar Hills, Assam) are exempted from income tax. If they plan to invest Rs 50,000 or more in Mutual Funds, these people can open a Demat Account without a PAN Card.