How to do an off-market transfer to a family member via Zerodha

From WebNotes, a public knowledge base. Last updated 12 May 2026. Reading time ~10 min. Level: Intermediate.

Key facts

Time required	1–2 business days for settlement; 3–5 days if target account setup is needed first
Cost	Rs 25 + 18% GST per ISIN per instruction (CDSL charge); no Zerodha surcharge
Tax treatment	Transfer at nil consideration to a relative is exempt from gift tax under Section 56(2)(x) of the Income Tax Act, 1961; capital gains arise only on eventual sale by recipient
Stamp duty	0.015% of the transaction value on off-market transfers (as per Finance Act 2019 / SEBI circular effective 1 July 2020)

Transferring shares from your Zerodha demat account to a family member’s demat account is a common estate-planning and gifting transaction. Under the Income Tax Act, 1961, a transfer of securities at nil consideration (gift) from one individual to a relative is exempt from the provisions of Section 56(2)(x) (gifts taxable as income). Relatives include spouses, siblings, parents, children, in-laws, and certain other lineal descendants as defined in the Act.

The technical process is an off-market transfer executed through CDSL Easiest, identical to a broker-switch transfer except that the target BO ID belongs to a different person rather than the same person at a different broker.

Before you begin

Confirm the definition of “relative” under the Income Tax Act if unsure. The exhaustive list is in Explanation to Section 56(2)(x). A transfer to a non-relative (friend, business partner) at nil consideration is taxable as income in the recipient’s hands if the market value exceeds Rs 50,000.
Confirm that the shares to be transferred are not pledged at Zerodha. Pledged shares cannot be transferred until the pledge is released.
Confirm the shares are not under lock-in (IPO allotment, ESOP vesting). Locked-in securities cannot be transferred before the lock-in expiry.
Stamp duty of 0.015% of transaction value applies on off-market transfers under the Finance Act 2019 framework (effective 1 July 2020, collected by CDSL/NSDL).
The recipient’s capital gains on eventual sale will be computed from the original acquisition date and cost of the donor, not the transfer date (per Section 49 of the Income Tax Act, 1961). Both parties should record the original cost and date.

Step 1: Collect the recipient’s demat account details

Ask the family member for their 16-digit CDSL BO ID or, if they hold an NSDL account, their DP ID (8-character, starts with IN) and Client ID (8 digits).

The CDSL BO ID appears on the recipient’s broker’s Console or portfolio page, on the Consolidated Account Statement (CAS) from mycas.cdslindia.com, or on their CMR (Client Master Report).

If the family member does not yet have a demat account, they must open one before the transfer. Opening a basic CDSL demat account typically takes 1–3 business days with most brokers.

Step 2: Register on CDSL Easiest (first-time setup)

If you have not registered on CDSL Easiest with your Zerodha BO ID, do so now:

Visit easiest.cdsl.com and click Registration.
Enter your 16-digit Zerodha BO ID, DIB (Delivery Instruction Booklet) serial number, and issue date. If you do not have your DIB, contact Zerodha support.
Set a password and TPIN.
Verify via OTP on your registered mobile.

If you are already registered, log in normally.

Step 3: Add the recipient as a trusted target account

The trusted account setup is a one-time CDSL security step. Each new target BO ID must be activated before instructions can be sent to it.

Log in to easiest.cdsl.com.
Go to Setup > Add Target Account.
Enter the recipient’s BO ID, account holder’s name, and the DP’s name.
Submit. CDSL sends a physical PIN mailer to the registered postal address of the source account (your Zerodha address). The mailer takes 3–5 business days.
When the mailer arrives, activate the target: Setup > Activate Target Account, enter the PIN.

After activation, the recipient’s BO ID is available for instructions.

Step 4: Submit the off-market transfer instruction

Log in to easiest.cdsl.com.
Navigate to Transactions > Off Market Transfer.
Click Add Instruction and enter:

Field	Value
ISIN	12-character ISIN of the scrip
Quantity	Number of shares to gift
Execution date	Today (if before 5:00 PM IST) or the next business day
Consideration	0 (gift at nil consideration; no money is changing hands)
Remarks	“Gift to relative” or the specific relationship (optional but good practice for records)
Target BO ID	Recipient’s BO ID from your trusted account list

Review and click Submit.
Authenticate with your TPIN and OTP.
Note the CDSL reference number.

Repeat for each ISIN to be gifted.

Step 5: Stamp duty collection

Under the Finance Act 2019 (effective from 1 July 2020), stamp duty of 0.015% of the transaction value applies to off-market transfers of securities. For a nil-consideration transfer, the transaction value is typically treated as the market value of the transferred securities on the transfer date. CDSL collects this stamp duty at the time the instruction is processed and remits it to the relevant state government.

The stamp duty is debited from the Zerodha trading account or the Easiest registered account. Verify that sufficient funds are available in your linked account. For a transfer of, say, Rs 1,00,000 worth of shares, stamp duty would be Rs 15.

Step 6: Confirm debit at Zerodha and credit at recipient

Your Zerodha Console: Check Portfolio > Holdings; the transferred shares should no longer appear (or the quantity should be reduced for a partial transfer) by the business day following execution.

Recipient’s broker: The shares should appear in the recipient’s holdings by T+1 from the execution date. The recipient should verify on their broker’s platform.

Step 7: Document the transfer for tax purposes

Both the donor and the recipient should maintain a written record of:

The CDSL Easiest transaction reference number
The date of transfer
The ISIN(s) and quantity transferred
The original acquisition date and cost of the donor (this becomes the acquisition cost for the recipient under Section 49 of the Income Tax Act)
The market price on the transfer date (for stamp duty computation and gift tax records)

The recipient should enter the cost of acquisition in their broker’s platform (most brokers allow manual cost entry under portfolio/holdings settings) using the donor’s original acquisition cost.

Aspect	Treatment
Gift tax in donor’s hands	Nil (transfer is not a taxable event for the donor; no capital gains arise on gifting)
Gift tax in recipient’s hands (relative)	Exempt under Section 56(2)(x) proviso; not treated as income
Capital gains on eventual sale by recipient	Computed on donor’s original cost and date of acquisition (Section 49, Income Tax Act)
Stamp duty	0.015% of market value, collected by CDSL

What can go wrong

Pledged shares: Any shares pledged for margin at Zerodha will be rejected by CDSL when you try to transfer them. Unpledge through Console before initiating the transfer.
Target PIN mailer not received: Contact CDSL on 1800-200-5533 for a reprint. Common if the registered address is outdated.
Wrong quantity transferred: CDSL off-market instructions are irreversible once executed. If you accidentally transfer the wrong quantity, the recipient must initiate a reverse off-market transfer back to your account, which incurs a fresh transfer charge.
Consideration field: Entering a non-zero consideration creates a contract that may attract capital gains for the donor and could be treated as a sale. For gift transfers, always set consideration to 0.
Minors as recipients: Transferring shares to a minor’s demat account is permitted. However, the minor’s account is operated by a guardian, and income (dividends, capital gains on sale) arising from the gifted shares is clubbed with the income of the parent (typically the father) under Section 64 of the Income Tax Act until the minor turns 18.

References

Income Tax Act, 1961, Section 56(2)(x) and Explanation (definition of relative), Section 49 (cost of acquisition on gift).
Finance Act 2019, Section 9A (stamp duty on securities transactions, effective 1 July 2020).
SEBI Circular SEBI/HO/MIRSD/MIRSD_RTAMB/P/CIR/2021/622, 13 October 2021.
CDSL Operating Instructions, OI-00-031, Off-Market Transfers and Easiest Platform.
Zerodha Support, “Off-market transfer charges”, support.zerodha.com (accessed May 2026).

WebNotes Editorial Team prepares factual how-to guides based on publicly available regulatory documents and broker disclosures. WebNotes is not affiliated with Zerodha Broking Limited. Tax treatment described is a general summary based on publicly available law; consult a qualified tax adviser for advice specific to your circumstances.

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WebNotes Editorial Team

The WebNotes Editorial Team covers Indian capital markets, payments infrastructure and retail investor procedures. Every article is fact-checked against primary sources, principally SEBI circulars and master directions, NPCI specifications and the official support documentation published by the intermediary in question. Drafts go through a second-pair-of-eyes review and a separate compliance read before publication, and revisions are tracked against the SEBI and NPCI rule changes referenced in the methodology section.

Last reviewed: 12 May 2026
Conflicts of interest: WebNotes is independent. No relationship with any broker, registrar or bank named in this article.