How to Transfer Shares Between Demat Accounts in India (the ACAT Equivalent)

Switching brokers in India is easier than most investors assume. There is no ACAT network as in the US, but the two depositories, CDSL and NSDL, let you move shares directly. You do not need to sell.

Three ways to move shares

The process

Tax treatment

• Own account to own account: not a transfer. No tax. Cost and holding period continue.
• Gift to a relative: exempt for both sides. The recipient takes over the original cost and holding period.
• Gift to a non-relative: taxable for the recipient above ₹50,000 of value.
• Off-market sale: a normal capital gain. No STT is paid, so the concessional listed-equity rates may not apply.

Every off-market transfer shows up in your Annual Information Statement. If you are moving ESOP shares out of a company-mandated broker, carry the exercise-date FMV as cost; our ESOP taxation guide explains why.

Why investors move shares

The common reasons are lower brokerage or annual maintenance charges, consolidating several accounts into one, moving ESOP shares out of a company-appointed broker, gifting shares to a spouse or child, and settling an estate after a death. Each case uses the same depository plumbing, but the tax and paperwork differ.

CDSL and NSDL: who holds your shares

Every demat account sits with a depository participant (DP), usually your broker or bank, and every DP connects to one of India’s two depositories: CDSL or NSDL. Your shares are recorded in the depository, not with the broker. That is what makes transfers possible without selling.

• CDSL to CDSL and NSDL to NSDL are intra-depository transfers.
• CDSL to NSDL or the reverse is an inter-depository transfer. It works the same way for you but can take a day longer and may cost slightly more.

Your 16-character demat ID tells you which: an ID starting with “IN” is NSDL; an all-numeric 16-digit ID is CDSL.

Online transfer step by step

CDSL Easiest

1. Register on the CDSL Easiest portal with your BO ID and PAN, and choose the “Easiest” option that allows you to transfer.
2. Your DP verifies and activates the registration.
3. Add the target demat account as a trusted beneficiary. A cooling period applies before you can use a new beneficiary.
4. Select the ISIN and quantity, choose the reason (for example, transfer to own account or gift), and authorise with an OTP.

NSDL SPEED-e works in a similar way through your NSDL DP, with an e-DIS authorisation instead of a paper slip.

Paper DIS transfer step by step

1. Ask your current DP for a Delivery Instruction Slip booklet if you do not have one.
2. Fill in the target DP ID and client ID, the ISIN, the quantity in figures and words, and the execution date.
3. Tick the reason for an off-market transfer and sign as per the account’s signatures (all joint holders must sign).
4. Submit to the DP before the cut-off time. Transfers usually complete in 1–3 working days.

Write ISINs carefully. A wrong ISIN or quantity is the most common reason a slip gets rejected.

Costs to expect

Check your DP’s tariff sheet. Moving 40 different holdings can cost more than expected if the charge is per ISIN.

Keeping your cost basis intact

The receiving broker does not know what you paid. After a transfer, its tax P&L may show the cost as zero or as the transfer-date price. Both are wrong for an own-account move or a gift. Upload the original purchase dates and costs to the new broker, or keep your own ledger. Otherwise, when you sell, your capital gains report will overstate or misdate the gain.

Transmission after death

When a holder dies, shares move by transmission, not by transfer. A nominee submits a transmission request form, the death certificate and their own KYC to the DP. Where a nominee is registered, the process is straightforward. Without one, heirs need a succession certificate, a probated will or other legal documents, which can take months. Transmission is not a taxable transfer, and the heir carries forward the deceased’s cost and holding period. Updating nominations on every demat account is one of the simplest pieces of estate planning available.

Closing the old account

Once the account is empty, submit a closure form to the DP. Confirm that no corporate actions such as dividends, bonus shares or rights entitlements are pending, and keep the final holding statement for your records.

Moving mutual fund units

Mutual fund units can sit in a demat account or in a statement-of-account (SOA) form directly with the fund house. Units in demat form move by the same DIS or online process as shares. Units in SOA form cannot be transferred with a DIS. You either convert them to demat form through your DP, which takes a few weeks, or keep them at the registrar and simply track them through the CAS. Transfers of mutual fund units to another person have historically been restricted, and rules vary by scheme, so check before you plan a gift of fund units.

Joint accounts, minors and NRIs

Joint holders: shares can only move to an account held in the exact same names in the same order, unless the transfer is marked as a gift or sale. Changing the order of names counts as a transfer.

Minors: a minor’s demat account is operated by a guardian. When the child turns 18, the account must be converted to a major account with fresh KYC; until then, transfers out need the guardian’s signature and a reason.

NRIs: non-resident investors hold shares through NRE or NRO-linked demat accounts under the Portfolio Investment Scheme. Moving shares between resident and NRI accounts, for example after a change in residential status, requires redesignation through the DP and correct reporting to the bank. Gifts from an NRI to a resident relative are allowed, but the regulatory route depends on the account type.

Checklist before you submit

• Confirm the target DP ID and client ID with a recent statement, not memory.
• Match the names and PAN on both accounts if it is an own-account move.
• Check for pledged or frozen shares, which cannot be moved until released.
• Record the reason correctly; a gift recorded as a sale creates tax questions later.
• Save the transfer confirmation alongside the original contract notes.