Transfer of Shares, Demat and Mutual Funds After Death (Transmission)

When an investor dies, shares and mutual fund units move to the family by “transmission”, not “transfer”. The nominee or surviving joint holder gets priority. If there is no nominee, the documents you need depend on the value of the holdings, with a simpler route for demat holdings up to ₹30 lakh and physical holdings up to ₹10 lakh per company under SEBI’s 2026 framework. A complete request is to be processed within 21 calendar days, and probate is no longer mandatory. Transmission only decides who the institution hands the holdings to. It does not decide who finally owns them.

Transmission and succession are two different questions

Keep them apart and most confusion disappears.

• Transmission: to whom will the depository participant, registrar or fund house hand over the holdings? The nominee or surviving joint holder comes first, and the institution is discharged once it transmits to that person.
• Succession: who finally owns the holdings? That depends on the will or, if there is none, the personal law.

In Shakti Yezdani v. Jayanand Jayant Salgaonkar (14 December 2023), the Supreme Court held that nomination of shares under section 72 of the Companies Act, 2013 and the depository bye-laws does not make the nominee the owner against the legal heirs. So the nominee is a conduit. If you are a nominee and also one of three children, expect to pass on two-thirds after the transmission.

Example: Rahul’s widowed mother in Jaipur died without a will, holding shares and mutual funds worth ₹22 lakh, with his elder brother Vikram as nominee. The depository participant and fund house correctly moved everything to Vikram. Under section 15 of the Hindu Succession Act, her two sons and her daughter share equally. A legal notice relying on Shakti Yezdani led to a family arrangement and Vikram transferred the shares in equal parts.

Step by step with a nominee or joint holder

1. Locate every holding. Use the demat statement, consolidated account statement, old share certificates and bank dividend credits.
2. Open a demat account in your own name if you do not have one. The securities will be credited to it.
3. File the transmission request form with the depository participant (demat) or the registrar or fund house (physical shares and fund units held as a statement of account).
4. Attach the death certificate (a verifiable copy, such as one with a QR code, is accepted under the 2026 framework), your client master list, and the share certificate or account statement as applicable.
5. Track the 21 days. If the request is rejected or delayed, ask for the reasons in writing.
6. Then settle with the other heirs according to the will or succession law.

If there are several nominees without stated percentages, they share equally. If a nominee died before the investor and the nomination was never changed, that share goes to the surviving nominees in proportion.

No nominee: what you submit, by value

In addition to the request form, death certificate and your demat details:

• Up to ₹30,000 (demat) or ₹10,000 (physical): a quick route for immediate family, with a request-cum-undertaking and a document showing the relationship.
• Up to ₹30 lakh (demat) or ₹10 lakh per company (physical): a notarised indemnity bond, plus either an affidavit-cum-no-objection from all legal heirs or a family settlement deed signed by all heirs. Listed companies may set a higher physical limit, so check the company’s notice.
• Above those limits: any one of: an affidavit-cum-no-objection from all heirs with a copy of the will and an indemnity; a legal heirship certificate from a revenue authority not below Tehsildar with an indemnity; or a succession certificate, letters of administration or a court decree.

The framework is set out in SEBI’s circular of 23 July 2026 and came into effect 30 days after issue, that is on 22 August 2026. Please check your depository participant’s form list, because the common forms are published by SEBI and may be revised.

The heirship certificate is the tehsil paper discussed in legal heir certificate vs succession certificate. Note the 2025 omission of section 213 of the Indian Succession Act: for transmission, SEBI has also stated that probate is not mandatory.

Physical certificates, joint holdings and old dividends

Physical shares. Old certificates in the dead person’s name need two steps. First, transmission into the heir’s name through the company’s registrar. Second, dematerialisation through a depository participant. Listed shares in physical form cannot be sold until they are dematerialised. Successfully transmitted physical holdings are credited to the claimant’s demat account.

Joint holders. The surviving holder gets the holdings on submitting the death certificate. As with bank accounts, survivorship decides whom the institution deals with. It does not settle ownership of the dead holder’s share.

Unclaimed dividends. If dividends went unclaimed for seven consecutive years, the shares may have been moved to the Investor Education and Protection Fund. Heirs claim them with Form IEPF-5 and the transmission documents.

Mutual funds. Units are transmitted by the AMC or its registrar. Find every folio through the consolidated account statement and registrar services. Systematic investment plans stop once the death is recorded.

Finding forgotten investments

• Search email for “contract note”, “CAS”, “dividend” and registrar names.
• Check bank statements for dividend credits and SIP debits.
• Look at the annual information statement on the income tax portal for dividends and securities transactions.
• Search the IEPF website for unclaimed shares and dividends in the deceased’s name.

If a company, registrar or fund house delays or rejects a complete request without reasons, you can complain on SEBI’s SCORES platform. For the claim as a whole, see how to claim a deceased person’s bank account, FD and locker. The inheritance and succession course includes ready model letters.

Frequently asked questions

Do I need probate to get my father’s shares transmitted?

No. Under SEBI’s 2026 framework probate is not mandatory for transmission. Probate may still help where a will is likely to be challenged or the estate is large.

Does being a nominee make me the owner of the shares?

No. In Shakti Yezdani (Supreme Court, 14 December 2023) the Court held that nomination does not override succession law. You receive the shares and the legal heirs are entitled to theirs.

How long should transmission take?

The framework requires a complete request to be processed within 21 calendar days. Delay or rejection must be explained in writing.

My mother’s shares are still in physical certificates. Can I sell them?

Not yet. Transmit them to your name through the registrar and then dematerialise them with a depository participant. Only then can listed shares be sold.

Where do I complain if the registrar does not respond?

Write to the company or registrar first, then use SEBI’s SCORES platform.

Quick quiz

Sources

• SEBI circular dated 23 July 2026, Simplification and standardisation of the framework for transmission of securities (effective 22 August 2026)
• Shakti Yezdani v. Jayanand Jayant Salgaonkar (Supreme Court, 14 December 2023)
• Companies Act, 2013, section 72 (nomination)
• Hindu Succession Act, 1956, section 15
• Repealing and Amending Act, 2025 (omission of section 213, Indian Succession Act, 1925)

This page is for education and general information, not legal advice for a specific case. Law as on 7 November 2026.