Demat and its nuances

[jitendergarg2k]

Hi Jitendra, this means that you have to square off daily? You will not be able to take delivery in your Angel a/c?

Hi Vasa1,

I don't have to square off daily. I can take delivery as well. How it actually works I don't know. I am trading this way for last 4 months without any problem.


Jitender Garg

 

[girdharilal]

this very important for all us ,what will happen insuch an eventuality,del share canot sit or stand in limbo

 

[SavantGarde]

Hi LT,

I have a few question like
- what are delivery instruction slips?

Are Like Written Instruction From BO To DP To Carry Out The Instructions Contained Therein.

- Which is better NSDL or CDSL

There Is No Difference Both Are Custodians

- What are the charges various brokers are charging for demat

Charges Vary From Nil (No AMC, No Transaction) To AMC Of 700 If Paying AMC Between 250-700 There Should Not Be Any Transaction (Good For Traders) Also You Have Option Of NO AMC Where Only Transaction Is Applicable Of Rs.11-25 (Good For Infrequent Buyers Who Have Less Than 32 Transactions In One Financial Year This Is Based On If Applicable AMC With No Transaction Is 700 Bucks)

- can we have one demat and 2 brokers and have the two brokers seperate so as to split one as an investment and one business (for tax purposes) etc

Normally One Portable Demat Account Should Be The Rule & POA For The Same Can Be Given To As Many Brokers Where One Has A Trading Account....Sadly, They Have Turned A Blind Eye To It Because They Earn Tons Of Money From New Accounts, Therefore If You Sign A POA Then The Broker Insists On Having A Demat Account With Them. If One Chooses Not To Then You Have Extra Work Of Doing It Through Instruction Slip For Every Payin.


Another Important Point For Traders With Frequent Trading Insist On A Free Demat Account Without Any AMC & Transaction Charges If Your Average Turnover Is Above Rs.5.0 Lacs Per Month.

Happy & Safer Investing

SavantGarde

 

[lazytrader]

Thanks for the information Savantji.

My DP is SBI and they don't charge me on per transaction. It's just Rs.350/yr but I haven't purchased any equities recently. That was how it was a yr ago. Besides now they have also provided the easiest facility free of cost recently. DP wise they seem to be good but their brokerage scheme with Motilal Oswal is very bad.

My DP account is with CDSL and some brokers are not in the list of registered DP's in the CDSL site in such a case with they be able to use a dmat account with CDSL.

I didn't quite get what you mentioned about the portable account and POA.

The angel dp charges (on post #7 http://www.traderji.com/equities/31650-demat-its-nuances.html#post345923) seem to be too high Rs.11/txn with angel and Rs.21/txn outside, besides they charge rs.300 AMC and extra if you want easiest service.

@jintendra

What I have learnt from our tax expert diosys is that you need to have 2 different demat accounts if you want to seperate the capital gains tax from business income (trading) using 2 different brokers won't work. The explanation is simply:
you are holding 50 L&T shares from 1-jan-08 and sell them on 1-jan-09 in such a case not tax (long term 1yr for equities) however lets say in sep-08 you saw an opportunity to make a swing trade in L&T and you buy 100 and sell it for 20% profit in a week then your long term tax will become short term tax because in the demat txns you'll see this:
1.Buy 50 LT 1-jan-08
2.Buy 100 LT 1-sep-08
3.Sell 100 LT 7-sep-08
4.Sell 50 LT 1-jan-09
Your sell in 3 will taken as selling the 1 + 50 shares of 2 and the rest 50 shares of 2 sold in 4

NSDL charges (for reference): https://nsdl.co.in/joining/joincharges.php

 

[SavantGarde]

Hi LT,

If A Broker Is Not A DP Of CDSL, That Doesn't Affect Your Transactions Or Credit Of Shares....It Is A Non-Issue....Because It Is Done Through NSCCL

Portable Demat Account Simply Means You Have One Demat Account & Several Trading A/Cs With Different Brokers & You Sign & Give The POA Of This Single Demat A/C To All The Broker, Whatever Buying & Selling Is Done Credit & Debit Of Shares Is All In This Single Demat Account.

I Am Sorry But Your Tax Expert Only Wants To Reduce His Workload, I Have Some Other Choice Words But Can't Write It Here...

You Have 100 Shares Of L&T Which Is Long Term For Swing Trade You Buy Another 100 Shares & Sell It Quickly.

What Is The Problem Your Long Term 100 Shares Are Still Reflected In Your Demat Account & 2nd 100 Hundred You Bought & Sold Within 365 Days Will Attract Short Term Capital Gains, Where Is The Need To Have 2 Demat Accounts For This.

By The Way You Have Accounting Package Where Your Transactions Are Entered & It Automatically Calculates All Your Taxes ST, LT Or Normal Business Income.

Happy & Safer Investing

SavantGarde

Thanks for the information Savantji.

My DP is SBI and they don't charge me on per transaction. It's just Rs.350/yr but I haven't purchased any equities recently. That was how it was a yr ago. Besides now they have also provided the easiest facility free of cost recently. DP wise they seem to be good but their brokerage scheme with Motilal Oswal is very bad.

My DP account is with CDSL and some brokers are not in the list of registered DP's in the CDSL site in such a case with they be able to use a dmat account with CDSL.

I didn't quite get what you mentioned about the portable account and POA.

The angel dp charges (on post #7 http://www.traderji.com/equities/31650-demat-its-nuances.html#post345923) seem to be too high Rs.11/txn with angel and Rs.21/txn outside, besides they charge rs.300 AMC and extra if you want easiest service.

@jintendra

What I have learnt from our tax expert diosys is that you need to have 2 different demat accounts if you want to seperate the capital gains tax from business income (trading) using 2 different brokers won't work. The explanation is simply:
you are holding 50 L&T shares from 1-jan-08 and sell them on 1-jan-09 in such a case not tax (long term 1yr for equities) however lets say in sep-08 you saw an opportunity to make a swing trade in L&T and you buy 100 and sell it for 20% profit in a week then your long term tax will become short term tax because in the demat txns you'll see this:
1.Buy 50 LT 1-jan-08
2.Buy 100 LT 1-sep-08
3.Sell 100 LT 7-sep-08
4.Sell 50 LT 1-jan-09
Your sell in 3 will taken as selling the 1 + 50 shares of 2 and the rest 50 shares of 2 sold in 4

NSDL charges (for reference): https://nsdl.co.in/joining/joincharges.php

 

[SavantGarde]

Hi LT,

Understand The Structure Of A Demat Account.

You Are The Beneficial Owner (BO) & It Is Your Locker Where You Hold Your Shares In Electronic Form.

a) No Demat Account Belongs To A Broker.

b) Broker Is Only A Depository Participant (DP)

c) CDSL/NSDL Are Custodians Providing You This Locker For A Fees.

d) As Opposed To Having A Joint Savings Account Where Just One Of The Joint Holders Signature Maybe Required, For A Demat Account With Multiple Holders At All Times & For All Correspondence Every Holders Signature Will Be Required.

Happy & Safer Investing

SavantGarde

 

[Mangafreakz]

@Savant Sir
Is it possible to have Demat account with indiabulls which does not have any TRansaction charges? because while filling up the form , I saw 10/- Per transaction in sell. Do I have to commit any minimum monthly Turnover with IB so that they can give me free of Charges Demat acc ?
Thanks.

 

[sam2trade]

Savantji,

So can a demat account be opened as joint holder account ?

Thanks,
Sameer.

Hi LT,

Understand The Structure Of A Demat Account.

d) As Opposed To Having A Joint Savings Account Where Just One Of The Joint Holders Signature Maybe Required, For A Demat Account With Multiple Holders At All Times & For All Correspondence Every Holders Signature Will Be Required.

SavantGarde

 

[SavantGarde]

Hi Mangafreakz,

10/- Is The Transaction Charge, It Is Always Incurred On SELL Not On BUY.

Usually Requires A Good Monthly Turnover To Get A Totally Free (No AMC & No Transaction, Except Per Pledge, Demat, Remat & Offmarket Transactions)Demat Account .

You Will Need To Speak To Them & Convince Them.

Happy & Safer Investing

SavantGarde

@Savant Sir
Is it possible to have Demat account with indiabulls which does not have any TRansaction charges? because while filling up the form , I saw 10/- Per transaction in sell. Do I have to commit any minimum monthly Turnover with IB so that they can give me free of Charges Demat acc ?
Thanks.

 

[SavantGarde]

Hi Sameer,

Maximum Of 3 Holders Are Allowed

Each Holder Will Be Designated As 1st Holder, 2nd Holder & 3rd Holder Respectively & They Will All Need To Sign Under Their Respective Designated Holder, Which Means If You Are The 1st HOLDER When Opening The Account You Will Always Need To Sign Where 1st HOLDER Is Mentioned.

Every Holder Has To Submit Their Pancard.

But Trading Account Is Opened Only For A Single Person Therefore All Three Holders Need To Have Separate Trading Accounts & Everybody's Purchase Will Get Credited To This Single Demat Account With Three Holders, Irrespective Of Their HOLDER Designation In The Demat Account

Happy & Safer Trading

SavantGarde

Savantji,

So can a demat account be opened as joint holder account ?

Thanks,
Sameer.