WHAT IS DEMAT ACCOUNT?
A Demat account or a dematerialized account provides the facility of holding shares and securities in an electronic format. Demat account makes the process of holding investments like shares, bonds, government securities, mutual funds, insurance, and ETFs easier doing away with the hassles of physical handling and maintenance of paper shares and related documents. In India, a Demat account is mandatorily required to buy and sell shares electronically.
TRANSFER OF SHARES FROM ONE DEMAT ACCOUNT TO ANOTHER
1. Check Eligibility:
Ensure that the shares you want to transfer are eligible for electronic transfer. Some shares may have restrictions, so it’s important to verify this information.
2. Account Linking:
Ensure that both the Demat accounts (from which shares are to be transferred and to which shares are to be transferred) are properly linked with the same PAN (Permanent Account Number).
3. Account Details:
Collect and verify the details of the receiving Demat account, including the DP ID (Depository Participant ID) and the client ID.
4. Transfer Form:
Obtain a Delivery Instruction Slip (DIS) or a Transfer Request Form from your current DP. Fill out the necessary details such as the security name, quantity, and other relevant information.
5. Signatures:
Sign the transfer form in the presence of authorized personnel. Some forms may require additional signatures and documentation.
6. Submit the Delivery instruction slip:
Submit the completed and signed transfer form to your current DP. This can usually be done physically by visiting the DP’s office or electronically through online platforms, if available.
- STAMP DUTY – If the off-market transfer is not a gift / self-transfer and involves a consideration stamp duty must be paid.
8. OTP VERIFICATION – The client will receive an OTP (One Time Password) from their respective Depository participant to further proceed on their respective email ID. Using this password, they can easily log in to their NSDL or CDSL account.
9. Processing Time:
The transfer process may take some time, usually a few days to a couple of weeks, depending on the depository. You can check the status of your transfer with your DP.
10. Confirmation:
Once the transfer is complete, you will receive a confirmation statement from both the transferring and receiving DPs. Verify the details in these statements to ensure the accuracy of the transfer.
REASONS BEHIND TRANSFER OF SHARES
- If a Demat account holder opts to change his broker and switches to a new broking firm, a new Demat account needs to be opened. In that scenario transfer of shares from old demats account to new demat account will take place.
- If a person is holding more than one demat account and wants to merge them into a single demat account.
- Reduced or minimum booking charges.
- Prompt online trading services and ease of doing transactions.
- Highly Advanced security and safety features.
- Add on features such as market alerts and notifications.
CONCLUSION
Now you have a clear and precise picture of the entire procedure of transferring shares between brokers. Having a genuine broker can make a huge difference in your overall trading and investing experience. If you want to begin your investment journey or want to give it a new start then Wealth Wisdom India Private Limited is the best place to do so and create and maximize your wealth.
FAQ
- Will there be any tax imposed on the transfer of shares from one broker to another?
No, there will be no tax imposed on the transfer of shares from one demat account to another.
- Do I have to sell my investments while transferring shares from an old demat account to a new demat account?
No, there is no need to sell shares or securities while transferring from an old demat account to a new demat account.