Want to Gift or Transfer Your Shares? Follow This Step-by-Step Guide

March 29, 2025 By: Shalini Bhardwaj0 comments

Transferring shares from one demat account to another, whether as a gift or for personal reasons, requires following a specific process. Unlike selling shares in the stock market, off-market transfers involve direct transfers between accounts. This guide will help you understand the step-by-step procedure to ensure a smooth and hassle-free transfer.

Understanding Off-Market Demat Transfers

An off-market transfer refers to the movement of shares between demat accounts without executing a sale on the stock exchange. This method is commonly used to:

• Gift shares to a family member or relative.
• Transfer shares to another demat account owned by you.
• Transfer shares to a legal heir in case of the original owner’s demise.

This process is different from regular stock market transactions and requires specific documentation.

Step-by-Step Process to Transfer Shares

1. Ensure Both Demat Accounts Are Active

Before initiating the transfer, verify that both the sender’s and recipient’s demat accounts are active and maintained with either NSDL (National Securities Depository Limited) or CDSL (Central Depository Services Limited). Transfers between accounts within the same depository are easier than those between different depositories.

2. Obtain a Delivery Instruction Slip (DIS)

A Delivery Instruction Slip (DIS) is required to initiate the transfer. You can get this slip from your Depository Participant (DP), which is usually your broker or bank. Some DPs also allow online transfer requests.

3. Fill Out the DIS Form Accurately

The DIS form must be completed correctly with the following details:

• Recipient’s Demat Account Number: If the recipient’s account is with NSDL, you must provide both the DP ID and client ID. For CDSL accounts, only the target demat account number is required.
• ISIN (International Securities Identification Number): Each stock has a unique ISIN that must be entered correctly.
• Stock Name and Quantity: Specify the name of the shares and the number of shares being transferred.
• Reason for Transfer: Mention whether the transfer is a gift, succession, or another reason.

Incorrect details can lead to rejection or delays in the transfer process.

4. Submit the DIS Form to the DP

Once the DIS form is filled, submit it to your DP for processing. Some brokers may require the signatures of both the sender and recipient for verification.

5. Verification and Processing by DP

After submission, the DP will verify the details and initiate the transfer. The shares are typically credited to the recipient’s demat account within 2-3 working days.

Charges Associated with Off-Market Demat Transfers

Different brokers and depositories charge fees for off-market transfers. Below is an estimate of charges:

Depository/Broker	Transfer Charges
NSDL	₹15 – ₹25 per transaction
CDSL	₹15 – ₹20 per ISIN
Zerodha	₹25 + 18% GST per ISIN
Upstox	₹20 per transaction
ICICI Direct	₹25 per DIS slip

If the transfer is due to a sale, applicable stamp duties may also be charged.

Important Points to Consider

• Same Depository Transfers Are Simpler: If both the sender and recipient have accounts in the same depository (NSDL to NSDL or CDSL to CDSL), the process is more straightforward. For inter-depository transfers (NSDL to CDSL or vice versa), additional forms are required.
• Tax Implications: Shares gifted to close family members are generally not taxable. However, if the recipient sells the shares later, capital gains tax will apply.
• Ensure Correct Signatures: The signature on the DIS form should match the DP’s records. A mismatch may result in rejection.
• Avoid Delays by Providing Accurate Details: Any incorrect information in the DIS form can delay or cancel the transfer process.

Following these steps carefully will ensure a seamless transfer of shares from one demat account to another.