A Demat Account stores these digital securities. A Demat Account gives you the convenience of managing your shares and transactions from any location. You cannot buy or sell shares without a Demat Account. One important aspect that people might not be aware of is that you can have multiple Demat Accounts. You also can transfer shares from one Demat Account to another. While the process of transferring can be easy, it is important to learn all aspects of the share transfer process and the participants involved in the process.
Who is involved in the transmission of shares?
The four bodies involved in the share transfer process are:
- The Investor
- The Current broker
- The New broker
- The Depository firm (NDSL or CDSL)
How to transfer shares from one Demat Account to another?
There are two different ways you can initiate share transfer from one Demat Account to another.
Manual Transfer Method:
First, you need to get a Delivery Instruction Slip (DIS) from your current broker. This slip will contain information related to the share transfer. You will need to fill out the details about the transfer to transfer the shares successfully. The details you need to fill in are as below:
- Beneficiary broker ID – This is a 16-digit unique ID of the broker, or the banks involved in the transfer. On the slip, you have to provide the ID for both your existing and new broker.
- International Securities Identification Number – This number identifies the individual share in your account. You should carefully enter this number along with the quantity of the shares.
- Mode of Transfer – If you want to do an Intra-depository transfer, you must choose off-market. Otherwise, select the inter-depository option.
The last step involves putting your signature on the slip and then submitting it to the existing broker. The broker will charge you for the share transfer. These charges may vary from one broker to another.
Online Transfer Method:
The CDSL depository firm offers an online transfer method called electronic access to securities information and execution of secured transaction (EASIEST). Using this method, you can easily transfer shares from one Demat Account to another online. Follow the steps given below to transfer shares online:
- Login to the CDSL site
- Click on the Register Online
- Select the EASIEST option
- Fill in the details asked
- Send a copy of the details to your Depository Participant
The Depository Participant will send the copy to the Central Depository. They will verify your given details, and you will receive the login credentials after 1-2 days. With these credentials, you can log in and see your broker list. Now you can transfer your shares.
What are the Tax Implications of Transferring Shares?
- If the transfer of shares is to the same person, then there will be no tax liabilities.
- If you transfer shares in the account of a different person, you will have to mention the reason; if the transfers are done via a gift deed and do not cross the limit, there will be no tax liabilities.
- If you transfer the shares you have initially received via a Demat transfer, you will be liable for capital gain tax.
To apply for a Demat Account at HDFC Bank, click here.
*Terms and conditions apply. This is an information communication from HDFC ank and should not be considered as a suggestion for investment. Investments in securities market are subject to market risks, read all the related documents carefully before investing.
