How to Transfer Shares from One Demat Account to Another?

In the modern securities market, most investors hold shares in electronic form through a Dematerialised (Demat) account. However, there are times when an investor may need to move shares from one Demat account to another. This could be due to consolidating multiple accounts, changing depository participants (DPs), shifting from one broker to another or transferring holdings to a family member.

Transferring shares between Demat accounts is a smooth and simple process if you understand the steps and requirements. This guide will walk you through the various reasons for such transfers, the types of transfers available, the documentation required and a step-by-step process to complete the transfer effectively and efficiently.

Reasons for Transferring Shares Between Demat Accounts

There are several reasons why investors may choose to transfer shares from one Demat account to another: –

• Consolidation of Holdings: Many investors open multiple Demat accounts over time, sometimes with different brokers. Consolidating all holdings into a single account makes management easier.
• Change of Broker or DP: Investors may shift to a broker offering better services, lower charges, or advanced trading platforms.
• Gifting Shares to Family Members: Share transfers can be a way of gifting assets to relatives.
• Reorganising Investments: Some investors prefer separating long-term holdings from short-term trading stocks in different accounts.
• Closure of an Old Account: If you no longer want to maintain an account, then you can transfer its holdings before closure.

Types of Share Transfers

Transfers between Demat accounts can be broadly classified into two types: –

1. Intra-Depository Transfer: When both the old and new Demat accounts are maintained with the same depository (for example, both under NSDL or both under CDSL), it is called an intra-depository transfer. These are generally faster and simpler.
2. Inter-Depository Transfer: When the two Demat accounts are with different depositories (for example, one with NSDL and another with CDSL), it is called an inter-depository transfer. The process here involves additional steps and different transfer forms.

Share Transfer Modes – Offline and Online

You can transfer shares either offline by submitting forms to your DP or online using depository portals.

1. Offline (Physical Form) – DIS Method

This method requires a Delivery Instruction Slip (DIS), similar to a cheque book for shares, issued by your DP. You fill in the details of the shares to be transferred and then submit the slip to your DP.

2. Online Transfer – CDSL Easiest / NSDL Speed-e

Both CDSL and NSDL offer online transfer facilities: –

• CDSL Easiest: Available for CDSL account holders. Allows transfer instructions through the internet.
• NSDL Speed-e: Available for NSDL account holders. Requires registration and digital authentication.

Documents Required for Share Transfer

Before initiating a transfer, you should have: –

1. Client Master Report (CMR) from the new DP – contains account details like DP ID, Client ID and depository type.
2. Delivery Instruction Slip (DIS) book from your existing DP.
3. PAN Card Copy – for identity verification.
4. Any Transfer-Specific Forms – required in some cases, especially for inter-depository transfers.
5. Proof of Relationship (if gifting shares) – like birth certificate, marriage certificate, etc.

Step-by-Step Process for Offline Share Transfer

Here’s how you can transfer shares from one Demat account to another through the offline mode: –

Step 1: Get the CMR Copy of the Target Demat Account

Obtain the Client Master Report from the receiving DP. It will include the new account details and confirm whether it is under NSDL or CDSL.

Step 2: Check Transfer Type – Intra or Inter Depository

Compare the depository types of your old and new accounts to ascertain the correct transfer method.

Step 3: Fill the Delivery Instruction Slip (DIS)

In the DIS book provided by your current DP:

• Write the ISIN (International Securities Identification Number) of each share you wish to transfer.
• Mention the quantity of shares.
• Fill in the target DP ID and Client ID from the CMR copy.
• Tick the correct transfer type: “Off-market” for intra-depository, or “Inter-depository” if the depositories differ.

Step 4: Submit the DIS to Your Current DP

Sign the DIS exactly as per the signature registered with your DP. Submit it at the branch or office.

Step 5: Verification and Processing

The DP will verify the details and process the request. The timeline usually ranges from 1–3 working days for intra-depository and 3–5 working days for inter-depository transfers…!

Step 6: Confirmation

Check your new Demat account statement or log in online to verify that shares have been credited.

Step-by-Step Process for Online Transfer

If both your current and new accounts are with the same depository, online transfer is quicker.

For CDSL Account Holders – Using CDSL Easiest

1. Visit the CDSL Easiest website.
2. Register using your old Demat account details.
3. Select “Trusted Account” facility and provide details of the target Demat account.
4. Authenticate using OTP or password.
5. Select the shares and quantity to transfer.
6. Confirm and submit the transfer request.

For NSDL Account Holders – Using NSDL Speed-e

1. Visit the NSDL Speed-e portal.
2. Register for the “Password” or “Smart Card” based login.
3. Add the target Demat account as a beneficiary.
4. Initiate a transfer request by selecting shares and quantity.
5. Authenticate and submit.

Charges for Share Transfers

While intra-depository transfers may have lower charges, inter-depository transfers are usually more expensive. Charges will depend on:

• The DP’s fee per ISIN or per transaction.
• Whether the transfer is off-market or market-based.
• Some brokers waive charges if you transfer shares to another account within the same brokerage.

Points to Remember

• Ensure names match exactly in both Demat accounts to avoid rejection.
• Always cross-check ISINs before submitting the DIS.
• Keep a copy of the DIS slip for your records.
• If you are closing the old Demat account, transfer all holdings first to avoid complications.
• Transfers are irreversible once processed.

Legal and Tax Considerations

If the transfer is not a simple consolidation but a gift or sale, it may have tax implications: –

• Gift Tax: Shares given as gifts to relatives are generally exempt. To non-relatives, they may be taxable if the value exceeds the prescribed limit.
• Capital Gains: If shares are sold and proceeds are transferred, capital gains tax may apply.

It’s advisable to maintain proper documentation, especially in transfers involving family members or non-market considerations.

Conclusion

Transferring shares between Demat accounts is a routine, yet it’s an important activity for investors. Whether you are consolidating holdings, changing brokers or gifting shares, understanding the correct process saves time and avoids errors. With the availability of both offline and online methods, you can select the one that suits your convenience.

A well-executed share transfer ensures that your investment portfolio remains organised, accessible, and aligned with your financial goals.