Stocks, ETFs or Gold? 10 simple steps to gift wealth and prosperity to near and dear ones this festive season

During this festive season, here is your opportunity to gift something which has the potential of recurring benefits for the beneficiary, something that he/she can continue to gain from, for a long time. You can gift stocks, Exchange Traded Funds (ETFs) or gold bonds to friends and family.

One can gift these financial instruments via different platforms. Users of Zerodha platform can do it by following these simple steps:

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1. Enter the name, mobile number, and email address of the person you want to gift stocks.
2. Select the stocks, ETFs, Gold bonds you wish to gift from your holdings.
3. Note that you can only gift stocks in your demat; you cannot gift T1 holdings. Also, only the stocks that are part of the approved list of securities can be gifted.
4. Wait for the recipient to accept the gift . 
5. If the recipient does not have a Zerodha account, they can open an account online and accept the gift.
6. The gift request is valid for a period of 7 days within which the recipient must accept, else the request is cancelled.
7. Once the recipient has accepted the gift, you will receive an email and SMS notification from Zerodha asking you to verify the recipient's details and approve the stocks to be transferred from your demat to the recipient using the CDSL TPIN . The TPIN facility has been made available to Individual, Joint, NRI, and Minor account holders by the depository (CDSL). Only the holders of these accounts can gift securities online on Console.
8. After you have approved the debit of stocks using the CDSL TPIN, Zerodha will set up an off-market gift transaction at CDSL that you need to verify using an OTP sent to you by CDSL.
9. Shortly after the off-market gift transaction is set up by Zerodha, which happens at 5 PM on every trading day, you'll receive an email and SMS from CDSL with this link to verify the transaction through an OTP.
10. You will be required to enter your PAN or 16-digit DP ID and generate the OTP. The OTP verification has to be done by 8 PM on the same day.

Once the transaction is successfully verified using the CDSL OTP, the stocks are transferred from your demat to the recipient's demat account. The holdings will show up in the recipient's account from the next day of the transfer.

Gifting Charges

There are no additional charges for gifting. Off-market transfer charge of Rs 25 or 0.03 per cent per scrip whichever is higher is applicable for these transfers. The charge will be debited from the trading account balance of the sender of the gift.

Points to Note:

1. Gifting securities from your account and also selling them on market at the same time might result in an auction penalty.
2. If clients have a negative balance in their trading account, they cannot use the gift feature to transfer the shares.

(Disclaimer: The views/suggestions/advice expressed here in this article are solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)