Dear Mr. Sreekanth,
I am a US based NRI and am planning to invest in Indian equity markets through a PIS account. I am told that demat account cannot be held as an either/survivor account, so I am planning to open a joint account with my spouse.
- Does joint account in a demat context mean that each of us owns one half of the shares? Do the definitions vary across DP's (Depository Participants) or are they the same?
- We want the shares to be inherited by each other when either of us passes away. Since we cannot have an either/survivor account, do DP's (Depository Participants) allow for TOD (Transfer on Death)?
- If they do not allow TOD, what is the best way to accomplish this? (since a US based NRI can only include real property in an Indian will, because succession laws of USA apply to movable property like shares)?
1 Answers
Dear Mythili,
Yes, the demat account cannot be operated on "either or survivor" basis like the bank account.
I believe that even if one account holder wants to make changes to the account he/she will have to get an approval from all the holders. In case of a demise of any one holder the account will be closed and the remaining joint holders (or Survivor) should open a new account. Securities from the old account will be transferred to the new one.
In the event of death of all the joint holders of a demat account, NSDL/DP will transfer the securities in that account to the nominee(s).
These are NSDL/CDSL/SEBI rules, applicable for all.
Kindly read :
https://www.relakhs.com/nominee-legal-heir-will-importance/
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