The process of moving shares from the account of a person who has passed away to their rightful survivors is called transmission of securities. Unlike a regular transfer, which is a voluntary sale or gift, transmission happens by law. In India, the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) follow rules set by SEBI to make sure this process is safe and fair. The steps you need to take depend on whether the account was held by one person or jointly, and if a nominee was added. While it might seem complex, knowing which documents to prepare can help the family manage the transition without much stress.

What is Transmission of Securities?

In the stock market, when a demat account holder dies, their shares do not just disappear. They belong to their survivors. However, they do not move automatically. The process used to officially move these digital shares to the new owner is called transmission.

It is important to know that transmission is different from a regular transfer:

There is no stamp duty to be paid for transmission.
It does not involve a buyer and a seller.
It happens because of a legal event like death or insolvency.

Different Situations for Transmission

The way you claim the shares depends entirely on how the original account was set up. There are three main ways this happens.

1. Joint Demat Account

If the account was held by more than one person, the process is usually simple. The principle of survivorship applies here. This means the surviving holders automatically become the owners of the shares.

The survivor needs to open a new demat account if they do not have one.
They must submit a Transmission Request Form (TRF) to the Depository Participant (DP).
A copy of the death certificate of the deceased holder is required.
Once verified, the shares move from the old joint account to the survivor’s account.

2. Single Holder with a Nominee

If the account was held by only one person but they had added a nominee, the nominee is the person who will receive the shares. SEBI encourages everyone to add a nominee to make things easier for the family.

The nominee needs to provide their own demat account details.
They must fill out the TRF and provide a notarized death certificate.
They also need to provide their identity proof (KYC) like a PAN card.

3. Single Holder without a Nominee

This is the most time-consuming situation. If there is no nominee, the legal heirs must prove they are the rightful owners. The complexity depends on the value of the shares in the account.

For value up to Rs. 15 Lakhs: The family can submit a simplified set of documents like an indemnity bond, an affidavit, and a No Objection Certificate (NOC) from other family members.
For value above Rs. 15 Lakhs: The family must provide a Succession Certificate or a Probated Will issued by a court.

Documents Needed for Transmission

To ensure the shares go to the right person, the DP and the Registrar (RTA) ask for specific paperwork. Below is a table showing the common requirements for different cases.

Document Required	Joint Holding	Single Holder (with Nominee)	Single Holder (no Nominee)
Transmission Request Form (TRF)	Yes	Yes	Yes
Notarized Death Certificate	Yes	Yes	Yes
PAN and KYC of the Claimant	Yes	Yes	Yes
Client Master Report (CMR) of Claimant	Yes	Yes	Yes
Indemnity Bond	No	No	Yes
Affidavit / NOC from Heirs	No	No	Yes
Succession Certificate (Above Threshold)	No	No	Yes

Step-by-Step Guide to the Process

If you are a nominee or a survivor, here is how you can start the process:

Inform the DP: Contact the bank or broker where the deceased person had their demat account. Tell them about the death and ask for the specific Transmission Request Form.
Open a Demat Account: You cannot receive shares in cash. You must have your own demat account. If you do not have one, open it first.
Get the Client Master Report (CMR): This is a computer-printed document from your DP that proves you have an active demat account. It must be signed and stamped by your DP.
Attest the Death Certificate: The death certificate must be an original or a copy attested by a Notary Public or a Gazetted Officer.
Submit the Paperwork: Hand over the completed TRF and all supporting documents to the DP of the deceased person.
Verification and Credit: The DP will verify the signatures and documents. If everything is correct, the shares will be moved to your account, usually within 7 to 15 days.

Why Nomination is Important

Adding a nominee is the best thing an investor can do for their family. It saves them from visiting courts or making legal rounds. As per recent SEBI rules, every demat account holder must either add a nominee or explicitly sign a declaration to opt-out of nomination.

If a nominee is registered, the transmission process is very fast. If not, the family might have to spend a lot of time and money getting a succession certificate from a court. Even if you have a will, the transmission process is smoother if that same person is named as the nominee in the demat account.

Important Points to Remember

Dividends and Payouts: Once the shares are moved to your account, you must also update your bank details to receive future dividends.
Joint Holding Sequence: If a joint account has three holders and one dies, the shares stay in the same account, but the deceased person's name is removed.
No Stamp Duty: Since this is a transmission by law, you do not need to pay the usual 0.015 percent stamp duty that applies to normal share transfers.
In-Person Verification: Sometimes, the DP might ask the claimant to visit the office in person for a quick identity check.

Conclusion

Losing a loved one is difficult, and dealing with financial paperwork can feel overwhelming. However, the transmission process is designed to protect the assets and ensure they reach the right hands. By checking the nomination status and keeping a notarized death certificate ready, you can complete the transfer of shares on the NSE and BSE smoothly. Always check the official website of your DP or the depositories like NSDL and CDSL for the latest forms and threshold limits.

Frequently Asked Questions (FAQs)

How long does the transmission process take?

Usually, once the DP receives all the correct documents, the shares are moved within 7 to 15 working days.

Can I sell the shares before they are transmitted?

No. You cannot sell shares that are in a deceased person's account. You must first move them to your own demat account through the transmission process.

What is a Client Master Report (CMR)?

A CMR is a stamped document provided by your broker that contains all your demat account details. It is needed to prove where the shares should be sent.

Is there a time limit to apply for transmission?

There is no strict deadline, but it is better to do it early so you can receive dividends and act on corporate actions like bonus shares or splits.

What if the value of shares is very low?

SEBI has provided a simplified process for small holdings. If the value is below the threshold (usually Rs. 5 Lakhs to Rs. 15 Lakhs depending on the DP), you may not need a court certificate.

Can I add a nominee after the person has died?

No. Nomination can only be done or changed by the account holder while they are alive.

What happens to the dividends during the process?

Dividends declared before the transmission stay in the deceased person's linked bank account. Once transmission is done, future dividends will come to the new owner's bank account.

Do I have to pay taxes on the transmitted shares?

No tax is paid at the time of transmission. However, when you sell those shares in the future, you will have to pay Capital Gains Tax based on the original price paid by the deceased person.

Can I transmit shares if the deceased person had a loan against them?

If the shares were pledged or had a lien, the loan must be cleared first before the shares can be moved to the survivor or nominee.

Where can I get the Transmission Request Form?

You can download it from the website of the broker (DP) or from the central depository websites like NSDL or CDSL.

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