Stock Market

How to transfer shares from one demat account to another?

Created on 12 May 2021

Wraps up in 5 Min

Read by 8.2k people

Updated on 10 Sep 2022

Can you own multiple demat accounts? Can you transfer shares between demats? No? Well, you’re mistaken. Here’s your ultimate guide to demat and share transfer.

The financial market of India has evolved over time. In the initial days, the process of buying, holding and selling the securities was quite tedious and cumbersome. But as time passed, processes got simpler as technology paved its way into the system. This induced more individuals to enter the financial market and carry out transactions.

One such revolution was the system of “dematerialisation”, or what is commonly referred to as a demat account. This system was initially introduced to convert the physical shares into dematerialised form. 

Our topic for the day is to simplify and understand how these demat accounts work, multiple demats and whether or not security can be transferred from one demat to another. If yes, then how? Read on to find out.

What is a demat account?

Demat account is an account of an investor or trader used to hold shares and other financial securities in electronic format. Instead of holding shares and other securities in physical form, they are stored in e-form. This demat account system was introduced in the year 1996 by the NSE.

How does a demat account work?

An investor first chooses a depository participant (DP). A DP is a stockbroker, a bank, or any other financial institution acting as an intermediary, which is registered with either of the two depositories present in India. Once the necessary formalities are completed, the investor is assigned a Beneficial Owner Identification Number (BO ID). This BO ID is a 16 digit unique identification number that is thereafter used to access the Demat account.

Demat accounts in India are managed by either of the two depositories, National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL). NSDL is NSE’s depository, and CDSL is the depository of BSE. CDSL & NSDL Both of these are government-registered share depositories.

Once securities are purchased, they are stored in these demat accounts, and any further transfer or sale is processed by the depositories.

Can one have multiple demat accounts?

In India, an individual is legally allowed to open more than one demat accounts. Though an investor is allowed to open multiple demat accounts, there is a condition. One cannot have multiple demat accounts with the same depository participant (DP) or stockbroker.  

Multiple demat accounts are usually preferred by individuals who are involved in both active trading and investment. Having multiple accounts help them segregate their investment portfolio and trading portfolio.

Cons of multiple demat accounts

Though multiple demat accounts are allowed to be opened, there are certain drawbacks too. The investor must bear in mind that every demat account that they hold will attract an annual fee in the form of Annual Maintenance Charge (AMC) payable to the depository participant or the stockbroker. This fee is charged irrespective of whether a transaction takes place or not. 

Also, the investor must ensure that regular transactions take place on all demat accounts held by them. An account left idle for a prolonged period could lead to it getting frozen. Once frozen, the entire e-KYC formalities have to be re-done.

Can shares be transferred from one demat account to another?

Absolutely. Shares from one demat account can be transferred to another account. The shares can either be transferred between accounts held by the same individual with two DPs, or it could be an off-market transfer. Off-market transfer means the transfer of shares from one person’s demat account to another’s.

Off-market transfer 

In case of an off market transfer, there are two parties involved, the selling client and the buying client. The selling client must fill and submit a “delivery instruction” form to his depository participant requesting them to transfer the shares to the buying client’s account. The buying client must fill and submit a “receipt instruction” form and submit it to his depository participant. 

The transfer will take place only if the details presented by both these parties match. If matched, the transfer will take place on the “execution date”.

Transfer of shares into one’s own demat account with different brokers

This could again be of two types, inter depository or intra depository. When the shares are transferred within the same depository, it is known as an intra depository. When the shares are transferred from one depository to another, it is termed as inter depository transfer.

The transfer could be done either manually or online.

1. Manual transfer

To transfer the share through an offline or manual mode, the investor must procure a delivery instruction slip (DIS) from his broker and fill in all the required information.

The details required are 

  • BO ID: The Beneficial Owner Identification Number which is assigned to every demat account.
  • International securities identification number (ISIN): This is a unique identification number allocated to each security in the demat account. The ISIN of securities transferred must be clearly mentioned.
  • Mode of transfer: Whether the transfer is inter depository or intra depository must also be mentioned.

Once the above details are mentioned, the form is to be duly signed and submitted to the broker. The broker does charge a fee for this transfer. However, if the demat account is to be closed, the broker would not charge a fee.

2. Online transfer

CDSL has a feature known as EASIEST (Electronic Access to Securities Information and Execution of Secured Transaction). One needs to register themselves on the website before they can transfer the shares online.

On the website, the investor is to go on to the EASIEST tab, fill in the details, and submit the printed form to the depository participant, which is later submitted to the depository. Once the depository verifies the investor’s details, login credentials will be provided. After logging in, all the shares held are visible and thereafter, shares can be transferred.

Tax implications

In case of shares being transferred from one demat account to another demat account of the same individual, there is no tax implication as the ownership doesn’t change.

If shares are transferred from one individual to another, no tax provisions are applicable as long as the transfer is backed by a genuine gift deed (upto a certain limit).


There could be various reasons for an investor to transfer his shares between demat accounts. Sometimes, the reasons could be “not very genuine” also. But it’s always advisable to practice legitimate trading rather than finding loopholes and engaging in malpractices.

You could find leeways for a while, but for how long? One day or the other, you’ll surely meet your doomsday if you’re making a fortune out of the inconsistencies in the system.

So, don’t get into the easy-money trap.

Invest wisely!

comment on this article
share this article
Photo of Ayushi Upadhyay

An Article By -

Ayushi Upadhyay

201 Posts


142 Post Likes


A Keen Learner. Tiny, brainy, and studious, this quiet one stays in her zone until she pops. And once she does, boy, are her comebacks snappy! There is no financial question that she can't answer through her magical blog-writing. 

Topics under this Article

Share your thoughts

We showed you ours, now you show us yours (opinions 😉)

no comments on this article yet

Why not start a conversation?

Looks like nobody has said anything yet. Would you take this as an opportunity to start a discussion or a chat fight may be.

Under Stock Market

"A few" articles ain't enough! Explore more under this category.

Share this post
share on facebook


share on twitter


share on whatsapp


share on linkedin


Or copy the link to this post -

copy url to this post