Off-Market Transfer
A movement of securities between demat accounts that is settled directly through the depository rather than through an exchange trade.
How it is identified
Test: securities move by depository instruction without an exchange trade and without clearing corporation involvement
Unit
qualitative
In depth
Off-market transfers are used for gifts, inheritance, transfers between one's own accounts, and pledges — situations where ownership changes without a market transaction. Because no exchange is involved there is no settlement guarantee, no price discovery and no securities transaction tax, and any money changing hands is arranged privately. Tax treatment depends on the reason: a gift to a relative is treated differently from a sale, and the recipient generally inherits the original cost and holding period. Using off-market transfers to disguise a sale is a route into regulatory trouble rather than a clever saving.
Worked example
Shares gifted to a spouse move off-market. The recipient inherits the original cost of acquisition and the original holding period, so a later sale is computed from the giver's purchase price, not from the transfer date.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Off-Market Transfer” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.