How do I know if I am eligible for opening trading and demat account?

There are no eligibility criteria for opening a trading account or demat account. If you are competent to enter into a contract under the Indian Contracts Act then you are eligible to open a trading account and a demat account. You just need to complete the KYC and the documentation. There is a catch here. As long as you only intend to trade equities, the account opening process is very simple. However, if you want to also trade in futures and options then the broker will insist on your income proof to ensure that you have the risk-bearing capacity. This proof can either be in the form of your bank statement or Income Tax Returns of the last two years.