Gifting securities: Documentation, transfer process, other details

We often gift cash or objects to our loved ones. A good alternative to such gifts is securities like shares, bonds or mutual funds. Here is what one needs to do while gifting securities to ensure a smooth transfer of ownership.

Which securities can be gifted?
Shares, bonds, debentures and mutual fund units held in demat form can be gifted. The transfer can be initiated via the depository participant (DP) of the person making the gift (donor) to the recipient (donee).


Gift deed
To initiate a transfer, a gift deed must be executed between the donor and recipient. It should list details of securities, such as ISIN and, quantity, and include the donor’s and recipient’s details, signatures and date of execution.

Documentation
The gift deed should be executed on a stamp paper and signed by the donor. It should be attested by at least two witnesses, and registered.

Online gifting of securities
Some depository participants provide the online option for gifting of securities through their trading portal, which is a more convenient process as it eliminates the physical paperwork involved. The status of transfer can also be tracked through their portal.

Transfer process
After gift deed is executed, the donor has to instruct the DP to transfer specified securities to recipient’s demat account. Details like donee’s demat account number, DP ID, and ISIN need to be provided.

Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.