Hey, whatever may be the reason for transferring stocks, here we explained the process to transfer stocks from one Demat account to another Demat account.
Do you already own a Demat account? Let’s have a glance at the simple way in which you can transfer your shares from one Demat account to another. It is as simple as making transactions from one account to another.
The only thing that changes in this transaction is you transfer your shares instead of money.
These may be the reasons why you want to transfer your share from one Demat account to another.
- You want to transfer your shares from one particular account to another to save a brokerage amount. For instance, if you come across a new broker with discounted prices then you can swap from your current broker to the new broker.
- You want to allocate your shares in multiple accounts depending upon the long-term plans like education, marriage, money for post-retirement, and whatnot.
- You have multiple Demat accounts and want to save all your money in a single account.
- You want to change your broker and an heir a broker for the entire day to get more information as well as tips daily to enhance your trading amount.
There are two different types of transfers. The transfers are based on national deposits in India. They are also known as NSDL and CDSL. The two categories they are divided into are called inter-depository transfer as well as intra-depository transfer.
If you transfer from one depository to another then it is called an intra-depository transfer. If you transfer in the same depository then it is called an intra-depository transfer. You can transfer your shares online or manually.
Online Procedure for Transferring Shares:
Many of us find the online procedure of transferring shares simple and easy. There is a feature named ‘EASIEST’ with which you can transfer your shares from one Demat account to another through online mode. Make sure you register yourself on the website before you start with this process let’s have a glimpse of the entire process.
- Press the register online link
- Choose the option EASIEST
- Fill in all the required details
- Get a printout and give it to the depository participant
- The depository participant will pass on all your details to the central depository. They will verify your details. Once they are done with verification please check your email id.
- You will receive login credentials within one or two days. You will get your broker’s list.
- Now you can easily transfer your shares from one Demat account to another.
Let’s Learn the Manual Procedure
For this procedure, you need to have a delivery instruction slip (DIS). You can get this from your broker. You need to fill in certain aspects in that slip to transfer the shares. Let’s have a look at the mandatory aspects which you need to fill in the slip.
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Beneficiary Owner ID:
In the beneficiary owner ID, you provide the ID of your current and new broker in the slip. It is a 16 Digit I’d of your broker.
International Securities Identification Number
An International Security identification number is an ID number through which you can identify your shares in the Demat account.
This is different for each share and thus you have to mention it carefully to provide information about which share you want to transfer to another Demat account.
Mode of Transfer
If you desire to make an inter-depository transfer you must go with the ‘off-market transfer option. If you don’t select this option then it will be considered an inter-depository transfer. Once you have filled up all the aspects in the form you need to put your signature. Make sure your signature matches exactly the database of the DP.
Once you are done with the entry process you need to submit it to your broker. You may be confused about the share you need to transfer into your new Demat account. It depends upon the broker whether he applies some charges for the transfer you are making.
The amount is not fixed and it may fluctuate depending on the broker. However, if you want to close your Demat account then your broker won’t charge you a single penny.
We are done with the manual process let’s understand the online way of sharing your shares from one Demat account to another.
Do you know about tax implications while transferring shares
Transferring shares can happen in two ways. One person owns multiple Demat accounts and wants to transfer shares from one Demat account to another. Another transfer occurs when one person transfers his shares to another individual’s Demat account. Let’s understand this through a simple example.
- Prashant owns three Demat accounts and wants to transfer his shares from the 1st Demat account to the 3rd Demat account.
This is one what of transferring shares. Over here Prashant won’t be charged any additional tax liability.
- The second situation occurs when Prashant wants to transfer his shares to his friend’s Demat account. Here you need to explain clear reasons for transferring the shares.
You won’t be charged additional tax liability if it is backed through a gift deed and doesn’t cross the limit. The tax liability will be counted from the day of the original purchase.
So what are you looking for? Open a Demat account and start transferring your shares.
Final Words:
In this article, we understood two ways of transferring shares the manual way and the online way. Both ways are easy and you can transfer your shares depending on your convenience. Make sure you pay attention to tax implications when you transfer your shares to avoid any kind of additional tax liability.
