How can I transfer shares in my demat account to my wife's account? Process explained

In our financial planning exercise, there may arise several requirements that we have to attend to time and again. Similarly, there can be a case when you may want to transfer some of the shares held in your demat account to your wife’s account.

The transfer of shares as an off-market transfer can be done online or offline, depending on your convenience. For the detailed process, here are the steps:

For online transfer, you can register with either CDSL Easiest or NSDL Speed-e. For registering on the Easiest platform, you will need the DP ID and Client ID.

As a second step, you can add your wife’s demat account as the beneficiary. For transferring, you need to click on the ‘transaction’ tab, select the setup, and fill in the ISIN of the stock to execute the transfer. Execution or completion of the transaction can be made by entering the transaction PIN and authorising the transaction by entering the PIN.

Importantly, some of the brokers also offer a facility wherein you can transfer the shares simply as a gift, and upon your authorisation to your depository, the broker will set an off-market transfer of shares.

Through DIS: For the offline transfer, you need to get a Delivery Instruction Slip from your broker.

Fill in the required details: For the transfer, you need to then mention the target or beneficiary account holder name, including the BO ID and ISIN details.

Now, as a last step, you can deposit the DIS slip with your broker.

In conclusion, while the transfer from one spouse is tax-free in the hands of the transferor, the taxability in the hands of the transferee cannot be ignored and in case when there is a considerable rise in the share price from the original price, the tax liability can be huge.