Difference Between Nomination and Transmission in Demat

The difference between nomination and transmission in demat is one of timing: nomination is a choice you make while alive, and transmission is the process that follows after you die. They work together, but they do different jobs and settle different questions.

The Difference in One Line

The words sound alike, so it helps to separate them cleanly.

• Nomination: a declaration by the account holder naming who the depository participant may transfer the securities to on their death
• Transmission: the formal process by which the DP moves a deceased holder’s securities to a nominee, a surviving joint holder or a legal heir
• Nomination happens before death, and transmission happens after
• You can have a transmission without any nomination, but a nomination does nothing until a transmission happens

What Nomination Is

It’s a simple instruction recorded on your demat account.

• You name one or more nominees and, if you name several, the share each should receive
• It’s registered at the demat account level, so whichever nominee is on the account receives all securities in it, including bonds
• It’s a free, one-time form that you can change whenever you like
• SEBI revised the nomination facility in a circular dated 10 January 2025, and guides differ on how many nominees you can name

What Transmission Is

It’s the claim process that starts once the holder has died.

• The claimant submits a Transmission Request Form, a notarised or attested death certificate and their own KYC to the DP
• The claimant needs a demat account to receive the securities, which move in kind
• SEBI requires DPs to process the request within 7 working days of receiving complete documents, though end-to-end timelines are often longer
• With a nominee, the process is administrative. Without one, legal heirs face more documents, such as an indemnity bond, an affidavit and, for higher values, a succession certificate

Who Claims in Each Case

Transmission follows whichever route applies.

• Joint account: the surviving holder takes over first, with the death certificate
• Single account with a nominee: the nominee claims
• Single account with no nominee: the legal heirs claim
• A nominee comes into play only when no surviving joint holder remains

Side by Side

A few contrasts make the two terms easy to separate.

• Who acts: the account holder for nomination, the claimant for transmission
• When: during the holder’s lifetime for nomination, after death for transmission
• What’s needed: a form for nomination, a TRF, death certificate and KYC for transmission
• What it does: nomination names a recipient, while transmission actually moves the securities
• Cost: nomination is free, while transmission may involve small costs such as an indemnity bond when there’s no nominee

Neither Decides Who Owns the Shares

This is the point that surprises most families.

• The Supreme Court, in Shakti Yezdani v. Jayanand Salgaonkar (2023), held that nomination under the Companies Act and the depository framework doesn’t create a third mode of succession and doesn’t override succession law
• In practice, the nominee receives the securities first, and a nominee who isn’t also the heir is described as a custodian or trustee for the legal heirs
• After the DP transmits the securities to the nominee, the nominee and the heir realign ownership with a transfer between themselves, according to Khaitan & Co
• A Bar & Bench piece cautions that saying “the nominee is always only a trustee” is too loose, so the detail depends on the facts
• A SEBI board paper from October 2024 proposed that nominees declare, while effecting transmission, that they receive securities as trustees for legal heirs

An Example

A simple case shows how the two interact.

• Your will names your spouse as sole heir, but your demat account names your adult child as nominee
• Transmission delivers the securities to the child first
• The child is legally obliged to hand them over to your spouse
• Registering a nominee didn’t change who inherits, and the will did

Terms That Get Mixed Up

Two other words sit nearby.

• Transfer: moving securities while the holder is alive, by sale or gift
• Transposition: reordering the names of joint holders
• Neither involves a death, so they aren’t transmission

What to Do

A few steps keep the two working together.

• Add a nominee to every demat account, since it speeds the claim
• Write a will, since nomination won’t decide ownership
• Keep the two consistent, so the nominee and heirs aren’t in conflict
• Tell your family which DP holds your securities and where the statements are

FAQs

Q1. Is nomination the same as transmission?

No. Nomination is a declaration you make during your lifetime, while transmission is the process that moves the securities after death.

Q2. Does the nominee become the owner of the shares?

Not necessarily. The Supreme Court held that nomination doesn’t override succession law, so a nominee who isn’t also the heir may have to hand the shares over.

Q3. Can transmission happen without a nominee?

Yes. Legal heirs can claim through transmission with more documents, such as an indemnity bond, an affidavit and, for higher values, a succession certificate.

Q4. How long does transmission take?

SEBI requires DPs to process it within 7 working days of complete documents. Guides quote 15 to 30 days or longer end to end.