Key Takeaways

• A demat account transfer moves shares electronically between two accounts and involves no buy or sell transaction.
• Always confirm whether it's an intra-depository or inter-depository transfer before choosing your method.
• Double-checking the DP ID, client ID, and ISIN prevents the most common transfer rejections.
• Off-market transfers attract stamp duty even though no exchange transaction is involved.
• For off-market share transfers, your Depository Participant (DP), such as mastertrust, may levy applicable transaction charges. The exact charges depend on the DP's pricing policy and the nature of the transfer. 

How to Transfer Shares From One Demat Account to Another: A Step-by-Step Guide

Transferring shares from one account to another may seem like an easy task, and indeed it is, provided that you understand how it works. There are many different reasons why people want to move their shares from one place to another. If you have not done it before, it may seem somewhat complicated.

This guide walks you through every method to transfer shares out of your share market demat account, step by step, so you know exactly what to fill in and where.

What Is a Demat Account Transfer?

A demat account holds your shares in electronic form instead of physical certificates. When you transfer shares from one demat account to another, you are instructing your depository participant (DP) to move the electronic holdings from your existing account to a different one, whether that's a new broker, a family member, or a separate account you hold.

This is not the same as the purchase and sale of shares. No transaction occurs on the exchange, and no new money exchanges hands unless you have settled on a consideration that is not through the platform. It is simply a transfer of securities from one demat account to another.

Step-by-Step Guide to Transfer Shares Between Demat Accounts

Step 1: Identify Whether It's an Intra-Depository or Inter-Depository Transfer

Check whether both demat accounts are with the same depository (NSDL-to-NSDL or CDSL-to-CDSL) or different depositories (NSDL-to-CDSL or vice versa). Same-depository transfers are called Intra Depository Transfers, while transfers between different depositories are called Inter Depository Transfers. This determines the form you'll use and the transfer process. 

Step 2: Get the Delivery Instruction Slip (DIS)

A Delivery Instruction Slip is provided by your depository participant in order to ask them to transfer the shares from your demat account. The DIS booklet always comes along with the demat account when you open the demat account, and if you have lost yours, you can ask for a new one.

Step 3: Fill in the Target Account Details

The required fields for the DIS process are the client ID of the target demat account holder, DP ID, ISIN of the shares to be transferred, and quantity. The most frequent cause of rejection of transfers is a single mistake in these fields.

Step 4: Choose the Right Transfer Mode

• Off-market transfer: Used when shares move between two demat accounts held by different people or between your own accounts across brokers, without any exchange transaction.
• CDSL Easiest: An online facility for CDSL-to-CDSL transfers that skips the need for a physical DIS.
• NSDL Speed-e: The equivalent online option if both accounts sit with NSDL.

If you are transferring within the same depository, the online route (Easiest or Speed-e) is usually faster than a physical DIS submission.

Step 5: Submit and Track the Request

Once you submit it, your DP will execute the request, and the shares will normally be credited to your demat account within a period of one-two days if the transaction is off-market based. Shares traded through CDSL Easiest / NSDL Speed-e will get settled faster.

Step 6: Confirm Receipt

Please refer to your DEMAT account login for verification of delivery of securities based on the ISIN and number supplied by you. In case there is any transfer from your account, please keep the DIS acknowledgment, as it might be needed in relation to tax issues.

Common Mistakes to Avoid

• Incorrect DP/Client ID: This is the main cause why transfers are rejected. Compare both columns with the statement of the receiving account.
• Not paying stamp duty: Transfers done off market involve stamp duty in a small amount, which is electronically deducted while transferring. Don't make a mistake by thinking that it is tax-free.
• Skipping the nomination check: When you're transferring your stocks to another member's demat account, make sure that the nomination and ownership details tally with your requirements because erroneous transfers may prove to be troublesome.
• Assuming instant settlement: Give it the standard one to two working days rather than expecting same-day reflection, particularly for physical DIS submissions.

How mastertrust Helps You Transfer Shares Smoothly  

Opening or managing a share market demat account with mastertrust gives you access to depository services through both NSDL and CDSL. Depending on your depository, you can use CDSL Easiest, NSDL Speed-e, or the standard Delivery Instruction Slip (DIS) process to transfer securities. mastertrust's support team can also help you verify your DP ID and Client ID before you submit a request, reducing the chances of rejection. 

If you're transferring securities from another broker to your mastertrust demat account, note that demat transfer charges are separate from broking charges and are governed by the applicable depository and DP charge structure. Once your holdings are credited to your mastertrust demat account, any future buy or sell transactions will be subject to mastertrust's brokerage plan, which offers a flat ₹20 per order for intraday, F&O, and equity delivery trades. 

mastertrust is a SEBI-registered stockbroker and a depository participant (DP) with both NSDL and CDSL, ensuring your demat holdings are securely maintained and accessible through the respective depository. 

Final Thoughts

It is not difficult to transfer your shares when you know whether it is an intra-depository or inter-depository transfer and what form needs to be filled out. Fill your DIS form in, choose the appropriate method of transfer that fits your depositories, and assign the normal settlement period. A properly set up demat account in the share market will ensure future transfers become a lot easier.

Frequently Asked Questions (FAQs)

1. What are the costs of transferring shares from one demat account to another?

Yes, off-market transfers may be subject to applicable stamp duty, where required, and depository participant (DP) charges are also applicable. These charges are deducted as per the applicable depository and DP fee structure at the time of the transfer. 

2. What is the time required for transferring the demat account?

Generally, 1 to 2 working days in case of off-market transfer, but in case of online transfer through CDSL Easiest / NSDL Speed-e, the process will be quicker.

3. Can I transfer the shares to my relative's demat account?

Yes, this is a common off-market transfer.

4. What's the difference between CDSL Easiest and a physical DIS?

CDSL Easiest is an online authorization method for CDSL-to-CDSL transfers, while a physical DIS is a paper form used for manual submission to your DP.

5. Is there any tax liability on share transfers between my own demat accounts?

Normally, it is not a taxable transaction, but you should retain transfer documentation, as your broker or tax accountant may be able to tell you based on your individual circumstances.

6. What happens if I enter the wrong client ID during a transfer?

The DP typically rejects the transfer request before execution, so no shares move; just resubmit with the correct details.