An investor can have one or multiple Demat accounts to hold his/her financial securities. They can transfer their securities from one Demat to another easily. Some of the reasons to make such transfers are reduction in Demat costs, the requirement of more or fewer services, separate Demat for trading and investing activities, differentiating investments with different investing purposes, etc. Let us find out how to transfer shares from one Demat account to another.
Modes of Transferring Securities
Securities can be transferred online and offline as well. Both ways are explained here. You can choose one mode as per your convenience.
As you know, there are two national depositories in India,
So, there are two types of securities transfer
Following are the steps to be followed to transfer securities online from one Demat to Demat:
Step 1: Simply register at any of the National Depositories’ official website.
For CDSL at ‘EASIEST’ Facility
For NSDL ‘Speed-e’ Facility
Step 2: You need to submit the duly filled-in registration form and the latest Transaction Statement in-person to your broker.
Step 3: Your broker will authorize your request further with the central depository and after successful verification, you will be able to operate your SPEED-e account using User-Id and Password. In the case of a joint account, you need to submit a Power of Attorney in favor of anyone’s account holder.
Following are the steps to transfer shares offline/manually
Step 1: Collect a Debit Instruction Slip (DIS) booklet from your brokerage firm where you are registered.
Step 2: Fill the ISIN number of the shares that you want to transfer from Demat to another, Target Client ID.
Step 3: Select the mode of transfer.
Step 4: Submit this DIS form to your existing broker and get an acknowledgment receipt from him. The transfer will be completed within 3 to 5 days.
How to Open Demat Account
If you are wondering how to open a Demat account, then you must know that it is a very easy process. You can open Bajaj Financial Securities Limited Trading (BFSL) Account free of cost. BFSL also offers low-cost brokerage solutions that help you maximize your profits from trading. You will need a Pan card, address proof, bank details, income proof, signature on white paper, and passport size photo in digital form so that you can upload these while filling the online Demat application.
It’s a 100% digital process for seamless trading on the web and app. You need not visit a branch for verification of documents and activation of your Demat account.
When you want to transfer your shares, that is in your own name, from one broker to another, you need to pay any tax because the ownership of shares is not changing but you need to pay a nomination fee to your broker for his services. On the other hand, if you want to transfer shares’ ownership to another person, for example, your parents, spouse, or children, you need to submit your request with a legally valid reason for doing so. In this case, capital gain taxes will be applicable. If you want to avoid taxes, support this share transfer with a gift deed.