Have you already opened a demat account? It’s time to learn how this eases the way you transfer shares from one demat account to another. In fact, trading through a demat account is just like making transactions through a bank account. The only difference is that you transfer shares through the demat account instead of money.
The procedure for transferring shares between Demat accounts is summarized below.
Step 1: This step is completed by the investor and given to the current broker together with a Delivery Instruction Slip (DIS). Step 2: The broker submits the depository the DIS form or request. Step 3: Your current shares will be transferred to the Demat account by the Depository. Step 4: The transferred shares will appear in the investor's new Demat account once all the shares have been transferred.
We must first differentiate between two types of transfers based on two national depositories in India: NSDL and CDSL.
When shares are transferred, the present holder of the shares transmits or transfers ownership of the shares to a new owner. The owner of the shares has the option to sell them at any time in order to obtain working cash or change the composition of their investment portfolio. The two most popular methods of such transfers are the selling and gifting of shares.
Mutual fund investments are not permitted if the Know Your Customer (KYC) procedure has not been finished. Each broker sets their own fee structure for this service.
One month must pass after the firm receives the share transfer agreement or share transfer certificate before delivering all of the company's share transfer certificates. Unless the corporation is prohibited from doing so by a court order or another official directive.
For the manual procedure, you will have to get the delivery instruction slip (DIS) from your broker. The DIS contains some mandatory fields that should be filled up to do the transfer of shares.
Read more: Demat account opening charges
CDSL has a feature called EASIEST to help you transfer shares from one demat account to another online. You need to register yourself on this website before you can begin. The process is outlined in the following:
To guarantee a seamless and safe process, numerous parties are involved in the transfer of shares from one Demat account to another.
Shares could be transferred to the different demat accounts of the same individual or different persons. In case of transfer of shares to the same person, there will be no added tax liability. Note that the capital gain tax will be counted from the initial date of purchase of the stock. The transfer date will not affect it. Suppose you transfer shares in the account of different persons. You will have to clearly mention the reason for such transfers. There will be no extra tax liability if the transfer is backed via a gift deed and doesn’t exceed the limit. Here the tax liability will be from the date of the original purchase. This can be traced via the audit trail. In case you transfer the shares that you have initially received via a demat transfer, you will be liable for capital gain tax. What are you still waiting for? Go ahead and open a demat account today to enjoy the benefits of online trading.
Read more: How to convert physical shares to demat
The requirements for transferring shares include using the right paperwork, verifying signatures, abiding by the law, maybe paying stamp duty, and following company-specific limitations.
A Demat instruction slip (DIS), a share transfer deed, as well as necessary Know Your Customer (KYC) paperwork are frequently needed documentation for share transfers.
You may transfer shares electronically between Demat accounts by starting the procedure using your online trading account, supplying the appropriate information—including the recipient Demat account information—and then following the steps.
Yes, you can initiate a full account transfer procedure, which entails completing the relevant papers and supplying information about both Demat accounts, to transfer all shares from one Demat account to another.
Yes. You can transfer your Demat holdings from one broker to another either manually or online.
The broker may apply some charges for a manual transfer. The amount may vary from one broker to another. However, if you are closing your Demat account, the broker cannot charge any fees.
One can operate two Demat accounts or multiple Demat accounts parallelly without having to close any existing Demat accounts.
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