The nature of household investment in India is witnessing a paradigm shift. People are moving away from physical assets like real estate and gold towards financial assets like stocks. The trend is reflected in the total number of demat accounts in the country. The number of demat accounts had risen to 3.65 crores as of June 30, 2019, from 1.89 crores in 2011. One cannot own stocks directly without having a demat account, which has made it common across India.

A demat account functions like a bank account, but the transactions involve assets like stocks and bonds instead of cash. You can easily transfer cash from one bank account to another, but can you transfer shares from one demat account to another? You can, but the task is not as simple as transferring money from bank accounts. Here are some reasons for transferring shares from a demat account to another account and how to do it.

Reasons for the transfer

Everyone is free to transfer his/her equity holding from a demat account to another account. But no one affects a transfer without a valid reason. Dissatisfaction with the broker can is a popular reason for the transfer of shares. Your broker may be charging a higher brokerage fee or you may not be satisfied with other services, which could lead to a change of broker. Some people also have more than one demat account and want to integrate their holdings into fewer accounts, which could necessitate a transfer of shares. Contrary to having numerous demat accounts, one may have a single account and may want to open new demat accounts for a demarcation between trading and investing activities. The reasons may vary, but the process is similar for everyone.

How to transfer?

There are two modes of transferring shares between demat account—online and offline. Even though the manual mode is more popular, the online process is gaining ground rapidly. The process is slightly different for both the modes. For the online mode, you will have to visit the site of the depository and register yourself. India has two depositories—NSDL and CDSL. Depositories are the financial institutions tasked with the safe-keeping of the shares and facilitating their transfer. After the registration, you will have to fill out a form and get it approved by the depository participant. DPs are the intermediaries between the depository and investors. After the verification process by the DP is complete, you will get a password in your registered email id. You can use the password to access your account and transfer shares from one demat account to another. If the online process seems too confusing, you can choose to manually transfer your shares.

How to manually transfer shares?

In case of offline transfer, the process will be slightly different for transfer within a depository and between the depositories. If the transfer is within the same depository, it is known as intra-depository transfer or off-market transfer. On the other hand, if the transfer is between different depositories, the process is called inter-depository transfer.

Once you have decided to transfer, record the details of the shares to be transferred. The manual process is slightly cumbersome when compared to the online process. With the details of the share, record the ISIN number. It is a 12-digit number required to identify shares, bonds, funds, etc. The ISIN number is extremely important as the transfer will be based on it.

In the next step, record the Target Client ID. It is a 16-digit code with the Client ID and DP ID. After recording the correct details, fill up the Debit Instruction Slip or DIS. Now you will have to specify the type of the transaction. Select the ‘off-market’ or ‘inter-depository’ option depending on the type of transfer. Submit the filled-in DIS slip with your existing broker and collect the acknowledgement slip. The transfer will be effected within 3-5 business days.


The transfer of shares from one demat account to another is a seamless process if one is careful with the details of his/her holdings. While transferring shares between accounts, one needs to clearly mention the purpose of the transfer. If the transfer is between accounts held by the same person, the purpose may not be of material importance. However, if the shares are being transferred to a different individual, it should be backed by a genuine gift deed. The capital gains tax in case of most transfer like from father to son or husband to wife will be calculated from the original date of purchase.