How does the transferring of shares or gifting works?

Transferring of Shares can happen in two different ways:

1. Within the Same Broker: If both the sender and the recipient have demat accounts with the same broker, the transfer process is usually straightforward. The sender fills out a Delivery Instruction Slip (DIS) and submits it to their broker, specifying the recipient’s demat account details.
2. Between Different Brokers: If the sender and recipient have accounts with different brokers, the process may involve more steps. The sender submits a DIS to their broker, and the recipient’s broker coordinates to complete the transfer.

Whereas, gifting of shares include:

1. Documentation: In addition to the DIS, a gift deed may be required, especially if the transfer is being made as a gift. The gift deed should state that the shares are being transferred as a gift without any consideration.
2. Tax Implications: Gifting shares can have tax implications for both the giver and the recipient. It is advisable to consult with a tax professional to understand any potential tax liabilities.