In India, there are two depositories, NSDL (National securities depository limited) and CDSL (Central Depository services limited) that offer dematerialization services. An investor can transfer Mutual Fund Units from one demat account to another demat account (i.e., transfer between DPs of NSDL) or from demat account of one depository to demat account of another depository (NSDL to CDSL or vice a versa) except for Mutual Fund Units which are under locked-in (say ELSS units). The transfer may take up to 2-3 days based on Execution date mentioned in the DIS.
Moreover, if the investor wishes to close the previous Demat account and is interested to transfer the Mutual Fund in new Demat Account, the investor will have to submit the duly filled and signed closure cum shifting request in this regard and within a week the Demat account will get closed. In this case, all the MFs including the locked-in (ELSS units) will get transferred.
Also, it is vital to understand the brokerage plans and charges levied by the new broker before making a shift to another Demat account. It must be understood that transfer of mutual funds from one Demat account to another Demat account does not lead to any tax implications owing to the transfer.
While transferring funds through an online portal, there is generally no need to attach account statements or other documents; however, it is prudent to attach a copy so that discrepancies can be avoided and the process becomes simple and quick.
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