How to Transfer Shares From One Demat Account to Another: A Complete 2025 Guide
- Why Would You Need to Transfer Shares Between Demat Accounts?
- Step-by-Step: How to Transfer Shares Between Demat Accounts
- Key Players in the Share Transfer Process
- 5 Critical Checks Before Initiating a Transfer
- Tax Implications You Can’t Afford to Ignore
- FAQ: Demat Transfer Questions Answered
Transferring shares between Demat accounts doesn’t have to be a headache. Whether you’re consolidating accounts, switching brokers, or gifting stocks, this guide breaks down the process into simple steps. Learn about intra-depository vs. inter-depository transfers, key participants, hidden charges, and tax implications—all with real-world examples and pro tips.
Why Would You Need to Transfer Shares Between Demat Accounts?
People transfer shares for various reasons, and understanding your motive helps streamline the process. Here are five common scenarios:
- Broker Switch: Moving from a high-fee broker to a discount platform like Zerodha.
- Account Consolidation: Merging multiple Demat accounts (e.g., after inheriting a family member’s portfolio).
- Gifting Stocks: Transferring shares as a wedding gift (note the ₹50,000 tax-free limit).
- Institutional Transfers: Shifting shares to a trust or corporate account.
- Depository Migration: Switching from NSDL to CDSL for better service features.
Fun fact: During the 2023 brokerage fee war, over 2 million Indians transferred accounts—with 40% citing "lower charges" as their reason (Source: SEBI Annual Report).
Step-by-Step: How to Transfer Shares Between Demat Accounts
- Obtain a DIS (Delivery Instruction Slip) from your DP—look for the hologram security feature.
- Fill in details like ISIN (e.g., INF204KB17I5 for Reliance), quantity, and recipient’s 16-digit Demat ID.
- Submit to your DP with a wet signature (even for eDIS, some brokers require physical verification).
- Use the Inter-Depository Transfer Form (IDTF)—downloadable from CDSL’s "Forms" section.
- Attach a copy of the recipient’s Demat account statement.
- Expect 3-5 working days for processing versus 1-2 days for intra-depository moves.
ICICI Direct charges ₹25 + GST per ISIN for intra-depository transfers, while inter-depository costs ₹50 + GST (2025 pricing). Always check updated fee structures.
Key Players in the Share Transfer Process
| Participant | Role | Example |
|---|---|---|
| Depositories (NSDL/CDSL) | Electronic record-keeping | CDSL’s Easi portal for holdings verification |
| Depository Participant | Interface between you and depositories | HDFC Securities, Kotak Securities |
| Issuer Company | Validates share authenticity | Tata Motors’ registrar (KFin Technologies) |
5 Critical Checks Before Initiating a Transfer
- Account Status: Ensure both accounts are active—frozen accounts cause rejections.
- ISIN Match: Verify ISINs match across depositories (e.g., Tesla’s NASDAQ vs. NIO’s NYSE listings differ).
- Corporate Actions: Avoid transfers during dividend record dates (like HUL’s July 15, 2025 cutoff).
- Power of Attorney: If using a POA, confirm its validity period covers the transfer date.
- Tax Documents: Keep transfer receipts for FY 2025-26 ITR filings.
Tax Implications You Can’t Afford to Ignore
No tax if transferring between your own accounts, but maintain a signed declaration (sample format on Income Tax Dept’s website).
Gifts above ₹50,000 to non-relatives are taxable. Example: Transferring 100 Infosys shares (₹1,600/share) = ₹160,000 taxable value.
Treated as normal capital gains. Short-term (held
FAQ: Demat Transfer Questions Answered
How long does an online Demat transfer take?
Most DPs process eDIS requests within 24 hours, but inter-depository transfers take 3-5 days. Delays occur if there’s a name mismatch—like "Ajay Kumar" vs "Ajay K."
Can I transfer shares to someone in another country?
Yes, but requires RBI approval under LRS (Liberalized Remittance Scheme). For example, transferring Tata Steel shares to an NRI son in the US needs FORM FC-TRS.
What if my DIS gets rejected?
Common reasons include signature mismatch or insufficient balance. Angel One provides rejection codes like "D001" for signature issues—always request detailed feedback.
