How to transfer shares from one demat account to another?
We all frequently operate our demat accounts during the buying and selling of shares in share market. The buying of shares results in our demat account being credited, whereas when you sell the shares, the securities are debited from the account. In this regard, the demat account functions identical to a bank account, the sole difference being that it deals with shares, instead of cash. Transferring your shares from one demat account to another is also possible. However, when you shift shares from your one demat account to another; the ownership remains the same, which means that there is no tax implication, and consequently, no transaction implication as well.
Then, why transfer shares from one account to another at all?
The benefits of transferring shares are numerous. They are as under
- If you have multiple demat accounts, you may wish to consolidate them to make it more simple, and reduce the demat costs.
- You might be having a single demat account at present, and may want to keep separate demat accounts for different activities, which would again require you to transfer shares from one account to another.
- People generally wish to keep their demat account and trading account with the same broker to keep things simple. You might want to change your demat account if you change your broker.
If you have long term plans for certain shares and may wish to build a firewall around them. In those cases, the demat accounts need to be classified accordingly, which would again require you to transfer shares from one demat account to another
How to transfer shares from one demat to another – the offline method
You are required to use the Debit Instruction Slip (DIS) booklet that is provided by your DP (Depository Participant) when you are transferring shares off-market. The first step is noting down the names of the shares you wish to transfer, along with the ISIN numbers unique to them. It is important to check that the ISIN numbers have been entered correctly, because the transactions will be processed based on these ISIN numbers. Next, you are required to enter the Target Client ID, which is a code consisting of 16 characters, and is a combination of the DP ID and the client ID. Then you have to select the mode of transfer. The "Off Market Transfer" column must be selected if it is a transfer of the intra-depository kind. If the transfer is from one depository to another, then select the option "Inter-Depository". It is important to ensure that the target recipient’s name and the 16-digit ID match perfectly; otherwise the request for transfer could be rejected. The ISIN numbers need to be mentioned clearly, and if any of the digits are illegible, then the request can be declined. Furthermore, the signature should also be identical to the signature in the DP’s master database.
How to transfer shares from one demat to another – the online method
Apart from using the DIS booklet, transfers of shares from one demat account to another, like most other transactions; can be done online now. These transfers are broadly categorized as intra-depository and inter-depository. India has two national depositories – NSDL and CDSL. An example of intra-depository transfer would be the transfers within NSDL accounts or CDSL accounts. If we were to transfer from accounts between these two depositories, that would be an inter-depository transfer. ICICI Bank demat account holders can also use an e-instruction facility for transferring the shares online from one demat account to the other. Let’s say you want to make an online transfer using CDSL
If an online transfer of shares is being considered, it can be simply done using CDSL website. The account holder is required to visit the CDSL website and get themselves registered. Once that is done, you need to fill the form and submit it to the DP. After the DP has completed the verification process, the account holder will then be allowed to make their own future transfers online.
Share transfer to your family members
You can also transfer shares from your account to your family members account including your spouse, kids, etc. The tax liability is computed keeping in mind the receiver of the gift and the amount of the gift. However, gifts from specified relatives are exempted, regardless of the amount. These relatives are spouse, father, mother, brother and sister. Whether you opt for the offline or online method of transferring shares, you must ensure that your demat account has a clear balance in order for the transfer to take effect.
Disclaimer: ICICI Securities Ltd. (I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Centre, H. T. Parekh Marg, Churchgate, Mumbai - 400020, India, Tel No: 022 - 2288 2460, 022 - 2288 2470. I-Sec is a Member of National Stock Exchange of India Ltd (Member Code: 07730) and BSE Ltd (Member Code: 103) and having SEBI registration no. INZ000183631. Name of the Compliance officer (broking): Mr. Anoop Goyal, Contact number: 022-40701000, E-mail address: email@example.com. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. The information mentioned herein above is only for consumption by the client and such material should not be redistributed.