Transmission of shares of deceased in physical form?

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naval rungta

117 Points Posted on 04 March 2025

This is repeat query for further clarification.

It is suggested that there's no need to open a demate account in the name of deceased who died on 3/1/1996 without any Will and held shares in different cos in physical form as at that time Demate facility was not available.

His legal heirs have obtained LoA in 2022 and there are 3 Administrators. These administrators have a demate account and savings account in their names.

The confusion is:

A) If there is need to open a demate account in the name of the deceased for converting physical shares in demate form or

B) Is it possible to apply and get the shares in physical form transmitted in demate form to the joint demate account of the 3 Administrators?

C) What will be incometax liabilities and consequences as shares received will again be transmitted amongst 8 legal heirs including 3 Administrators.

Kindly do clarify and help in resolving the critical issue mentioned herein above.

TIA

Replies (2)

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 04 March 2025

To clarify the process and tax implications, I'll address each point:

A) Need to Open a Demat Account in the Name of the Deceased: - *Not Necessary*: As the demat facility was not available at the time of the deceased's death (1996), and the legal heirs have obtained the Letter of Administration (LoA) in 2022, it is not necessary to open a demat account in the name of the deceased.

B) Transmission of Physical Shares to Joint Demat Account: - *Possible*: Yes, it is possible to apply for transmission of physical shares to the joint demat account of the 3 Administrators. - *Process*: The Administrators will need to submit the necessary documents, including the LoA, death certificate, and identity proof, to the respective companies or their RTAs (Registrar and Transfer Agents) to get the shares transmitted in demat form.

C) Income Tax Liabilities and Consequences: - *No Capital Gains Tax*: As the shares are being transmitted from the deceased to the legal heirs (including the Administrators), there will be no capital gains tax liability. - *No Income Tax Liability*: The transmission of shares itself does not attract income tax liability. -

*Future Capital Gains Tax*: When the legal heirs sell the shares in the future, they will be liable for capital gains tax on the sale proceeds. Additional Points: -

*Transmission to Individual Accounts: After transmission to the joint demat account, the shares can be further transmitted to the individual demat accounts of the 8 legal heirs, including the 3 Administrators. -

Stamp Duty and Other Charges*: The Administrators may need to pay stamp duty and other charges for the transmission of shares.

Aashok Kumar Sharma

Finance/Compliance Consultant

77177 Points Posted on 13 November 2026

Transmission of physical shares of a deceased holder:

• SEBI requires transmission to be processed only in dematerialised form (since 2022). The heir must open a demat account, submit ISR-1/ISR-2, Form SH-13 or the RTA's transmission forms, death certificate, and legal heir or succession documents (simplified for values up to Rs 5 lakh).

• Tax: transmission isn't a transfer; the heir's cost and holding period are the deceased's.