When a person starts trading or investing in share market, they need a demat and trading account which is the basic requirement for entering in the market. A trading account is for performing the transactions i.e. buying and selling of the securities whereas one opens the Demat account with a SEBI registered stockbroker to hold the securities in an electronic or digital format. The Demat account is a safe option to keep the securities and it makes the process of online trading quicker and easier. One can also transfer the securities from the old Demat account to a different demat account with another stockbroker.
The ownership of shares and securities remains the same, when transferring them from one account to another. Hence, the transaction does not take place and no tax obligations arise.
Traders or investors may opt for share transfer from one Demat account to another, maybe they want to switch to another stockbroker. In such cases, a trader or investor needs to open a Demat account again with a new stockbroker of his/her choice. If a trader is having many Demat accounts, he or she may merge all the accounts into a common account for holding securities.
Share transfer from an existing account to a new Demat account in India:
The share transfer in India is of two types depending on the national depositories: CDSL and NSDL.
- The transfer of shares within the same depository is known as an intra-depository transfer.
- The transfer of shares from a depository to another depository is known as inter-depository transfer
Online transfer of securities and shares:
The online transfer of shares can be done from one account to another and it can be done easily via CDSL platform. A trader or an account holder must visit the website of CDSL and complete the registration procedure. The form has to be submitted with a stockbroker and the process of document verification is initiated. Once the process of verification is done the trader will be able to make further transfers to the account. Let’s understand the process or steps on how to transfer shares from one demat account to another.
The steps to transfer shares are mentioned below:
Register online on the CDSL website. Click on the tab saying, “Register Online”.
Fill in the basic and required details in the form.
Complete the form and click on the tab saying, “Print Form”.
Print the form and submit it to the account holder’s stockbroker.
Your documents will be verified by the stockbroker.
Once the process of verification is completed, you will receive a password for the account on the email address of the trader.
Use the password provided to log into your account and start transferring securities or shares from an old demat account to new demat account.
An account holder may opt for transferring shares from one account to another because of many reasons. One such reason could be another broker may be charging a lesser brokerage. The process is very simple and quick on the CDSL platform. The process of transferring securities from one account to another is secure and does not change the ownership of securities. Therefore, this process does not attract any type of tax obligation. An account holder may easily complete the process at his/her convenience in very little time.