We all use our demat accounts to buy and sell shares in the stock marketon a regular basis. When you acquire shares, the securities are credited to our demat account, and when you sell shares, the securities are deducted from the account. A demat account is comparable to a bank account in this regard, with the distinction that it trades in stocks rather than cash. It is also feasible to transfer your shares from one demat account to another. When you transfer shares from one demat account to another, however, the ownership stays the same, therefore there is no tax impact and, as a result, no transaction implication.
So, what's the point?
There are various advantages to transferring shares. They are as follows:
- If you have many demat accounts, you may want to combine them to make things easier and save money on demat fees.
- You may now have a single demat account and want to maintain numerous demat accounts for certain purposes, which would need the transfer of shares from one account to another.
- To make things easy, most people choose to have their demat and trading accounts with the same broker. If you switch brokers, you may wish to modify your demat account.
- If you have long-term ambitions for specific stocks and want to create a protective barrier around them. In such circumstances, the demat accounts must be reclassified, which will necessitate the transfer of shares from one demat account to another.
Offline alternative
When transferring shares off-market, you must utilize the DIS booklet that your DP provides. The first step is to jot down the names and ISIN numbers of the equities you wish to transfer. Because the transactions will be executed based on the ISIN numbers, it is critical to double-check that they have been entered accurately. After that, you must choose a transfer mode. If the transfer is intra-depository, the "Off Market Transfer" option must be chosen. Select the option "Inter-Depository" if the transfer is from one depository to another. It's critical to double-check that the intended recipient's name and the 16-digit ID are the same; otherwise, the transfer request may be refused. The ISIN numbers must be properly stated, and if any of the digits are unreadable, the request may be denied. Additionally, the signature should match the signature in the DP's master database.
Distribute the funds to your family members
You may also transfer shares from your account to the accounts of your family members, such as your husband or children. The tax obligation is calculated based on the gift recipient and the value of the gift. Gifts from certain relatives, however, are free from the tax, regardless of their value. The spouse, father, mother, brother, and sister are among these relations. You must verify that your demat account has a clean balance in order for the transfer to take place, whether you choose the offline or online way of transferring shares.
Popular Stocks: ONGC Share Price | SBI Life Share Price | UPL Share Price | TCS Share Price | Titan Share Price
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account