Transferring shares from one Demat account to another is a common requirement for investors who want to consolidate their investments, change brokers, move holdings to a family member’s account, or shift from one Depository Participant (DP) to another. The process may look complicated at first, but transferring shares in India is generally straightforward when you understand the available methods.
Investors can transfer shares between Demat accounts through online or offline methods. The exact process depends on whether both accounts are with the same depository and which facility your broker or Depository Participant provides.
What Is a Demat Account Transfer?
A Demat account transfer means moving securities such as shares, bonds, ETFs and other eligible securities electronically from one Demat account to another.
For example, suppose you have shares in Demat Account A with one broker and want to move them to Demat Account B with another broker. Instead of selling the shares and buying them again, you can transfer the existing securities directly.
The ownership of the securities can remain with the same person when transferring between your own accounts, subject to the applicable account and depository requirements.
Why Transfer Shares From One Demat Account to Another?
There can be several reasons for transferring shares:
- Changing your stockbroker
- Consolidating investments into one Demat account
- Moving shares between your own Demat accounts
- Transferring eligible securities to a family member
- Closing an old Demat account
- Moving investments to a different Depository Participant
- Managing investments more efficiently
Transferring shares can also be useful when an investor has multiple Demat accounts and wants to simplify portfolio management.
Two Ways to Transfer Shares
In India, shares can generally be transferred using two broad methods:
- Online transfer
- Offline transfer using a Delivery Instruction Slip (DIS)
The online method is generally more convenient because it can be completed electronically. However, the exact steps can vary depending on the depository and DP.
1. Transfer Shares Online
Online transfer is commonly used when the investor wants a convenient electronic process.
If your Demat account is eligible for online transfer, you may need to register for the relevant depository’s online facility and link or verify your Demat account.
The broad process is:
Step 1: Register for the Online Facility
Visit the official website of the relevant depository’s online securities transfer facility and complete the registration process.
You may need to provide details such as your:
- Demat account number
- PAN
- Mobile number
- Email address
- Depository Participant details
The registration process may require verification.
Step 2: Add the Target Demat Account
After registration, you generally need to add the Demat account to which you want to transfer your shares.
You may need details such as the target account’s Beneficiary Owner ID (BO ID) or other account information.
Check the details carefully before proceeding because an incorrect account detail could cause the transfer request to fail or require additional corrective steps.
Step 3: Select the Securities
Choose the shares or other securities that you want to transfer.
You may be able to select individual securities and specify the quantity to be transferred.
For example, if you hold 100 shares of a company and want to transfer 40 shares, you can enter the required quantity where the facility permits partial transfers.
Step 4: Authorise the Transfer
The transfer request may require authentication or authorisation through the method specified by the depository or DP.
Complete the required verification and submit the request.
Once processed, the securities should appear in the destination Demat account according to the applicable processing timelines.
2. Transfer Shares Using a DIS
If you do not want to use an online facility, you can generally transfer securities using a Delivery Instruction Slip (DIS) provided by your Depository Participant.
A DIS works somewhat like an instruction to your DP to transfer specified securities from your Demat account.
You usually need to provide information such as:
- Target Demat account details
- DP ID and Client ID
- ISIN of the security
- Name of the security
- Quantity to be transferred
- Reason or type of transfer, where required
- Your signature
The completed DIS is submitted to your DP according to its prescribed procedure.
Always verify the details carefully before submitting the form.
What Is ISIN and Why Is It Important?
ISIN, or International Securities Identification Number, is a unique identification number assigned to a security.
When completing a physical transfer instruction, the ISIN helps identify the exact security being transferred.
For example, different securities have different ISINs, so investors should avoid entering an ISIN without checking it carefully.
How Long Does a Share Transfer Take?
The time required for transferring shares can vary depending on the method used, the depository, the DP and whether all information and authorisations are correct.
Online transfers can be more convenient because the request is submitted electronically. Offline transfers may require additional processing time because the instruction has to be submitted and processed by the DP.
If a transfer is delayed, check the status with your DP and verify that the destination account details and other information were correct.
Is There Any Tax on Transferring Shares?
A transfer of shares is not automatically the same as selling shares.
For example, moving shares between your own Demat accounts generally does not involve a sale simply because the securities have moved from one account to another. However, tax treatment can depend on the nature and reason for the transfer, particularly when securities are transferred to another person.
If shares are gifted or transferred to a family member or another person, income-tax rules relating to gifts, cost of acquisition and future sale may become relevant.
Therefore, investors should consider obtaining professional tax advice when transferring valuable holdings to another person.
Charges for Transferring Shares
The charges depend on your broker or Depository Participant and the method used.
Possible charges may include:
- DP-related charges
- Account closure or transfer charges
- Applicable taxes or statutory charges
- Charges for physical instruction processing, where applicable
Before initiating the transfer, check the latest fee schedule of your DP.
Important Things to Check Before Transferring Shares
Before submitting a transfer request, keep these points in mind:
Verify the destination account: Make sure the target Demat account number, DP ID and other details are correct.
Check the ISIN: If using a DIS, verify the ISIN and security name carefully.
Keep a record: Save the transfer request, acknowledgement and transaction statement.
Check your holdings afterward: Once the transfer is processed, verify that the shares have been credited to the destination account.
Do not share confidential credentials: Never share your trading password, OTP, PIN or other security credentials with another person merely to complete a share transfer.
Final Words
Transferring shares from one Demat account to another can be a useful way to consolidate investments, change brokers or manage multiple accounts without selling your securities. Investors can generally use an online transfer facility or submit a Delivery Instruction Slip through their Depository Participant.
Before initiating the transfer, carefully verify the destination Demat account details, DP information, ISIN and quantity of securities. Also check the applicable charges and tax implications, especially when transferring shares to another person.
Most importantly, use only your broker’s or depository’s official channels and keep proper records of the transfer request until the securities appear correctly in the receiving Demat account.
