How to nominate someone

The plain answer

Nomination names the person who collects your holdings if you die, so your family can claim them through a document check instead of a court process. You can name up to three nominees per account, assign the share each receives, and change the nomination any time from the app with the nominee’s PAN and date of birth. The nominee collects and passes on; the legal heirs inherit.

The rule changed on 1 September 2026. SEBI’s circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676, dated 29 May 2026 and titled “Ease of doing investments: Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios”, is now the governing framework. It requires a nomination or an opt-out declaration on new accounts, and paragraph 11 applies its clauses to existing accounts and folios as well. Jointly held accounts are optional for nomination, and all joint holders have to consent.

What the framework does not carry is a penalty. The freezing provision that once sat behind the nomination deadline was removed outright by SEBI’s circular of 10 June 2024, and it never took effect, because every date it carried was extended before it fell due. The 2026 circular has no freezing provision at all. Paragraph 10.2 prescribes bi-annual emails and SMS messages and a login pop-up, and nothing more.

The mechanics in one line: with a nominee, transmission after your death starts with a death certificate and the nominee’s transmission request. Without one, it starts with the succession documents, such as a succession certificate or a legal heirship certificate. The nominee field is the difference between the two starting points, and it costs nothing to set.

One correction does most of the work on this page. A nominee does not become the owner. SEBI has stated that the nominee receives the securities as a trustee for the legal heirs and must pass them on according to the succession plan. A legal heir’s right comes from succession law, a will, probate, a succession certificate, a legal heirship certificate or a family settlement. A nomination decides who collects the asset, not who ultimately owns it.

Why the nominee field exists

Before nomination was pushed into every account, a family claiming a deceased investor’s shares started from zero: prove the death, prove the relationship, prove the inheritance, and only then receive the assets. The nominee field short-circuits that chain by recording in advance who the depository should hand the assets to, which turns the claim into a document check instead of a court process.

SEBI’s circular of 23 July 2021 first made the choice explicit: eligible demat and trading accounts had to record either a nomination or an opt-out declaration, and new demat accounts opened from 1 October 2021 had to make the choice at opening. That circular is history now. It was superseded by the nomination circular of 29 May 2026, which took effect on 1 September 2026 and expressly replaced all the earlier nomination circulars and frameworks.

The 2021 requirement arrived with a deadline for existing accounts, and that deadline moved five times before the consequence behind it was dropped altogether. Nomination for trading accounts was made voluntary in the September 2023 circular as an ease-of-doing-business measure. The field exists, in short, because the alternative was families losing years to paperwork, and the regulator decided the paperwork should not win.

The five extensions explain the reminder emails and SMS messages that arrived in those years: depositories and their participants chased the choice while a deadline sat behind it. What changed in June 2024 is not the field but the pressure behind it, and the circular of 2026 keeps only the nudging. The sections below separate the rule from the consequence.

The rule today, and the consequence that no longer exists

As at 16 September 2026 the circular that governs nomination is SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676, dated 29 May 2026 and titled “Ease of doing investments: Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios”. It came into effect on 1 September 2026, and paragraph 15 expressly supersedes every earlier nomination circular, including the circular of 23 July 2021, the circular of 10 June 2024 and the frameworks that followed them.

Three clauses do most of the work. Paragraph 11 says the clauses apply mutatis mutandis to existing accounts and folios, so the framework is no longer confined to accounts opened after 1 October 2021. Paragraph 5.1 confirms that an investor can provide up to three nominees. Paragraph 13 sets the effective date, 1 September 2026.

The obligation is therefore wider than it was: it now reaches accounts that already exist, not only new ones. The consequence is narrower than it has ever been, and this is the part most pages get wrong. The 2026 circular carries no freezing provision at all. Paragraph 10.2 prescribes bi-annual emails and SMS messages to account holders, and a pop-up at login, and nothing further.

That is the whole enforcement mechanism: reminders, twice a year, and a nudge on the screen. Non-submission does not freeze the account, does not block a debit, does not stop a sale, does not attract a charge and does not put the account in breach of a penalty. An account without a recorded choice is an account the depository will remind you about, and nothing more.

The history behind that position is worth having, because most warnings still circulating come from it. The circular of 23 July 2021 (SEBI/HO/MIRSD/RTAMB/CIR/P/2021/601) introduced the choice and applied it to new accounts from 1 October 2021. Its deadline for existing accounts was extended to 31 March 2022, then to 31 March 2023, then to 30 September 2023, then to 31 December 2023, and finally to 30 June 2024. Before the last of those dates was reached, the circular of 10 June 2024 (SEBI/HO/MIRSD/POD-1/P/CIR/2024/81) removed the consequence that had been attached to the deadline, and it took effect immediately.

So the freeze never happened. Every date was pushed back before it fell due, and then the provision was deleted. Pages written in that window still describe a debit freeze as the penalty for silence, and a message that tells you a deadline is approaching is describing a framework that no longer exists in that form. If you receive one, check the date on the circular it cites before acting on it.

One note for anyone who checks this against the Master Circular for Depositories: the version dated 3 December 2024 states that it consolidates circulars only up to 30 September 2024, so its nomination section is modified by the circular of May 2026. Cite it for what it governs, and cite the 2026 circular for the nomination rule itself.

Who can be a nominee

The framework is deliberately permissive on who: family, minors with a guardian, and unrelated people all qualify. The restriction is on how many, and on the honesty of the role. A nominee is a conduit, not an owner, so choosing someone for convenience rather than trust creates a problem for your heirs later. The usual choice, spouse or child, is usual for a reason.

One structural exception matters more than any of the permissions: a jointly held demat account does not carry a nomination in the usual sense. The surviving joint holder takes the holdings on the death of the first holder, which is why the joint account structure exists. Under the 2026 framework nomination is optional for jointly held accounts, and where a joint account does record one, all the joint holders have to consent to it. Nomination is the protection for the sole account; the survivor clause is the protection for the joint one.

The guardian question deserves one clarification, because a minor nominee is a common choice and the guardian field is easy to get wrong. The guardian recorded for a minor nominee is typically the natural guardian, a parent, and the guardian’s details replace nothing about the nominee’s own record. If transmission happens while the nominee is still a minor, the guardian receives and holds for the minor, which is the full extent of the guardian’s role.

How to add or change one

The flow lives in the app’s profile or account services section, and the whole job takes about a minute. You enter the nominee’s name and relationship, add the PAN and date of birth that the form asks for, assign the share percentage, and confirm. A change follows the same steps with the new nominee’s details and takes effect after verification.

The confirmation arrives without any extra step: the monthly CAS prints the nominee on every account, so the next statement proves the record. The habit that keeps the nomination honest is one glance at that line whenever the CAS email lands, which is also the habit the CAS guide recommends.

If the app flow is not the route you want, the 2026 framework also recognises giving the nomination online through a Digital Signature Certificate, through Aadhaar e-sign, or through OTP-based two-factor authentication. Where a wet signature is used instead, the signature needs no witness. There is no notary, no attestation and no visit anywhere for any of these routes.

The practical point: adding or changing a nominee takes about a minute online once you are logged in, and the change shows up on your next statement. Whether a broker charges for a KYC or record modification varies, and not every broker publishes that fee, so confirm it on your own broker’s pricing page rather than assuming it is free.

What the nominee needs

Two facts to remember. Under the framework that took effect on 1 September 2026, the mandatory fields are the nominee’s name and relationship; the PAN and date of birth are what the depository forms collect alongside them. And the nominee’s KYC is not required until the nomination is actually triggered, which is what keeps the process to one minute today. The nominee does not sign anything and does not visit anywhere; the record is entirely yours to create and change.

One accuracy note saves a failed transmission later: enter the name exactly as it appears on the nominee’s records. A nickname or a spelling difference is a mismatch the depository may flag at transmission time, which is precisely the moment you do not want a mismatch to appear.

Three nominees and share percentages

The three-nominee cap comes with a share allocation, and the percentages are yours to set. You can name one nominee at 100%, or split the holdings 50-50 between two, or divide across three in any proportions you choose. The depository applies the percentages at transmission time.

The three-nominee limit is current law, not a legacy of the 2021 framework. Paragraph 5.1 of the circular of 29 May 2026 states that investors can provide up to three nominees, and the Master Circular for Depositories and the depository nomination forms state the same. That is why the cap is described here as settled rather than as something that may change with the next circular.

The mechanics are stated on the nomination forms the two depositories publish. The CDSL and NSDL forms allow up to three nominees, with a percentage share specified for each. Where no percentage is given, the depositories treat the nominees equally, which means a form that names three people without percentages splits the account three ways rather than leaving the shares undivided.

The percentages are worth writing down somewhere your family will find them, because the record lives with the depository and not in the paperwork at home. A nomination set years ago, with a split nobody remembers, still governs how the holdings divide at transmission.

If the assigned shares total less than 100%, the remainder passes to the legal heirs through the normal succession route, which is the framework’s answer to the person who wants to nominate partially. The cleanest setups are the simple ones: one nominee at 100%, or an explicit split you have written down somewhere your family will find it.

A concrete example: you hold 1,000 shares and split the nomination 60-30-10. At transmission, the first nominee receives 600 shares, the second 300, and the third 100, each as a custodian for the heirs. The percentages apply to the holdings as they exist at the time of transmission, so a split set today scales with whatever the account holds later.

One more mechanical fact about the percentages: the record covers the account as a whole, not a list of securities. Shares, ETFs, bonds, mutual fund units held in demat form, everything in the account splits by the same percentages at transmission. You cannot assign stock A to one nominee and stock B to another; the split is across the account, not across its contents.

What the nominee does when it matters

The nomination you set today becomes the nominee’s job on one specific day, and the job is small and concrete. The full mechanics live on the transmission page; the nominee’s part of it is four steps:

• Intimate the DP with the death certificate, which stops further debits on the account while the claim is processed.
• Complete their own KYC and the depository’s transmission request form, which is why the nominee’s PAN was collected at nomination time.
• File the supporting documents the depository specifies: the nominee’s latest Client Master List, and the identity and death documentation the depository asks for.
• Receive the holdings in their own demat account, split by the recorded percentages. The depository or the depository participant is discharged once the transfer is made.
• Pass the holdings to the legal heirs according to the succession plan, because the nominee collected, they did not inherit.

Read that last step twice when choosing a nominee. The person you name is the person who collects the assets and passes them on, which makes the choice one of reliability first and relationship second. A nominee who resists the handing-over step converts a smooth process into a dispute between the family and the nominee, and the matter then moves from a depository desk to a court.

The document list above is the whole reason the nomination route is described as lighter. The nominee does not have to prove a relationship to the depository, and does not have to prove who the heirs are. The depository checks the death, checks the identity of the person recorded against the account, and transfers. What happens after that transfer is a matter of succession law, which is the subject of the next two sections.

Nominee vs legal heir

The nominee is a custodian of the assets for the legal heirs, not the final owner. Nomination smooths the transfer; succession decides the ownership. If the nominee is also an heir, the two roles merge in one person. If not, the nominee must pass the assets to the heirs.

This is SEBI’s own position, not an inference. In its circular of 19 September 2025 SEBI stated that the nominee receives the securities as a trustee for the legal heirs and must pass them on according to the succession plan. On 23 July 2026 SEBI wrote that statement into the operative transmission framework, so it now sits inside the process the depositories apply rather than beside it. The wording matters: trustee, not owner.

A legal heir’s right comes from succession law. Depending on the family and the documents, that means a will, a probate, a succession certificate, a legal heirship certificate or a family settlement. None of those rights is created by the nomination, and the nomination does not override a will as between the heirs. The two instruments answer different questions. The nomination answers who collects the asset from the depository. Succession law answers who owns it afterwards.

That distinction has one practical consequence worth stating plainly. A nomination that names someone other than the person the will gives the shares to does not change who the shares belong to. It changes who has to hand them over, and it can put the nominee in the position of holding assets that are not theirs. Families where the will and the nomination point in different directions are exactly the families that end up in dispute.

The field exists to remove the procedural delay, not to rewrite inheritance, which is why a will still matters where the family’s wishes differ from the default succession. Think of the nominee as the courier and the will as the label on the package: both do different jobs, and families that set both move fastest.

Where the situation is specific, this page stops. A dispute between heirs, a will that is being probated, a nomination that conflicts with a will, or a holder who is an NRI all move the question from process into law, and the right next step is a professional who can read the documents in front of them. DematOpen is an Authorized Person of Upstox and publishes process explanations; it does not give estate-planning advice, and whom you nominate is a personal decision.

Onward transmission to the heirs

Because the nominee holds as a trustee, the step after the depository transfers the securities is the one that actually matters: the nominee passes them to the legal heirs. That onward movement is now recorded in a defined way rather than left to the family to arrange quietly.

Since 1 January 2026, when a nominee transmits the securities onward to the legal heirs, the standard reason code TLH (Transmission to Legal Heirs) is used with the Central Board of Direct Taxes. The code exists so the movement is reported as what it is, a transmission to heirs, rather than being recorded as an ordinary sale or gift in the depository and tax records.

Section 47(iii) of the Income Tax Act, 1961 sits behind that treatment. The clause provides that a transfer of a capital asset under a gift, or under a will or an irrevocable trust, is not regarded as a transfer for the purposes of capital gains. The onward transmission of securities by a nominee to the legal heirs falls within that clause, so the movement itself is not treated as a transfer.

What that means for any individual estate, and how it interacts with the heirs’ own cost records and future sales, is a tax question, and this page does not compute anyone’s tax liability or advise on it. The reason code and the clause are stated here because they explain why the process is structured this way, not because a reader should apply them without advice.

Transmission without a nomination

Without a nomination, the legal heirs have to establish their right before the depository can transfer anything. That is the whole difference, and it is a difference in documents rather than in outcome: the heirs still inherit, they simply have to prove how.

The succession documents are not interchangeable, and which one applies depends on the family and on whether a will exists. A succession certificate and a legal heirship certificate are different instruments issued through different processes, and a probate is a third. Where no will exists, the heirs and their shares follow the applicable succession law for the person who died. Which of these a particular family needs is a legal question, and it belongs with a professional, not with a broker or a depository helpdesk.

Two practical notes sit on the depository side of this. First, the account is stopped for debits when the death is intimated, so the documents have to be assembled before anything moves. Second, the transmission process runs through the depository participant that holds the account, which means the paperwork is filed where the account sits rather than at a central office.

The honest summary of this page: a nomination does not make anyone an owner, and not having one does not put the account in breach. What the nomination changes is the route. With one, the family walks a document check. Without one, the family establishes the inheritance first and then transfers. Both routes end with the securities in the hands of the people the law says they belong to.

The opt-out option

Opting out is a legal choice, and the framework provides for it explicitly: the holder records either a nominee or a signed opt-out declaration. The regulator wants a decision on file, not a particular decision. Some people choose the opt-out because their will handles distribution, or because the estate structure makes nomination awkward. Under the 2026 norms the requirement applies to existing accounts as well as new ones, so the choice is available on either.

The cost of the choice is procedural: without a nominee, the heirs start from the succession documents even when the will is clear. The nominee field and the will are not rivals; they are layers, and keeping both costs almost nothing. What is no longer true is the old warning that a blank nomination attracts a freeze. The consequence behind the deadline was withdrawn on 10 June 2024, and the circular of 2026 carries no freezing provision at all.

Opting out is recorded in the same app section as the nomination itself, and it can be reversed later. Where the choice is required the record is created either way; what the opt-out does is select the route the family will walk if transmission is ever triggered.

The mechanics of the choice are worth knowing before you make it. Recording an opt-out is a declaration in the same profile flow, needs no documents beyond the session verification, and switches the account from the nominee route to the succession route for good until you change it back. The change is reversible in one app session, but the transmission process it selects is not: the route that exists on the day of death is the route the family walks.

Edge cases

• Joint accounts. Nomination is optional on a jointly held account, and where one is recorded all the joint holders have to consent. The surviving holder takes the holdings after the first holder’s death is registered with the DP. Check the joint account guide for the survivor-clause mechanics.
• The nominee dies before you. A deceased nominee cannot receive anything, so the record becomes useless the moment it is needed. Replace the nominee promptly when one dies. This is the most common stale-record failure.
• Each account needs its own record. Nomination is per account, not per person. If you hold accounts at three brokers, all three need the nomination captured, because each account carries its own record with its own depository and one nomination does not travel to the others.
• A minor nominee grows up. Nothing needs updating while you are alive. If transmission happens while the nominee is still a minor, the recorded guardian receives and holds for the minor. If the nominee has turned 18 by then, they receive directly.

When to revisit the nomination

The nomination that stays correct for a decade is rare. Life moves, and the field moves with it in one minute per change. The events that should trigger a look at the nominee record:

• Marriage. Add the spouse as nominee, or switch the allocation if the account predates the marriage.
• Birth of a child. Add the child as a second or third nominee, with a guardian recorded.
• Divorce. Remove the former spouse. The nomination stays valid until you change it, and a stale spouse-as-nominee record is a conflict waiting to happen.
• Death of the nominee. Replace the nominee immediately; a deceased nominee cannot receive.
• A new will. Read the nominee split against the will. Nomination does not override the will, but a mismatch between the two adds friction at the worst moment.

The lowest-effort version of this discipline is the yearly check: once a year, when you review the CAS, glance at the nominee line. If the name there still matches your current life, the record is current. If not, the fix is one app session.

What people usually get wrong

Questions people ask

Where to go next

With the rule and the correction in place, the useful next steps are the transmission process itself and the statement that proves the nominee record:

Sources

• Securities and Exchange Board of India. “Circular SEBI/HO/OIAE/OIAE_IAD-3/P/CIR/2026/12676, dated 29 May 2026: Ease of doing investments, Modified Norms for Nomination in Demat Accounts and Mutual Fund Folios,” effective 1 September 2026, including paragraph 5.1 on up to three nominees, paragraph 10.2 on bi-annual reminders and the login pop-up, paragraph 11 on existing accounts and folios, paragraph 13 on the effective date and paragraph 15 on supersession. Accessed 16 September 2026.
• Securities and Exchange Board of India. “Circular SEBI/HO/MIRSD/RTAMB/CIR/P/2021/601, dated 23 July 2021: Nomination for demat accounts and trading accounts, and submission of nomination forms,” the framework that applied to new accounts from 1 October 2021, superseded by the circular of 29 May 2026. Accessed 16 September 2026.
• Securities and Exchange Board of India. “Circular SEBI/HO/MIRSD/POD-1/P/CIR/2024/81, dated 10 June 2024,” removing the consequence attached to the nomination deadline, effective immediately, superseded by the circular of 29 May 2026. Accessed 16 September 2026.
• Securities and Exchange Board of India. “Master Circular for Depositories SEBI/HO/MRD/MRD-PoD-1/P/CIR/2024/168, dated 3 December 2024,” nomination and transmission paragraphs including paragraph 1.15 on the nominee limit. The circular states that it consolidates circulars only up to 30 September 2024, so its nomination section is modified by the circular of 29 May 2026. Accessed 16 September 2026.
• Securities and Exchange Board of India. “Circular dated 19 September 2025,” stating that a nominee receives the securities as a trustee for the legal heirs and must pass them on per the succession plan. Accessed 16 September 2026.
• Securities and Exchange Board of India. “Transmission framework of 23 July 2026,” consolidating the trustee position, the transmission documentation and the onward transmission to legal heirs. Accessed 16 September 2026.
• Government of India. “The Income Tax Act, 1961,” section 47(iii) on transfers under a gift, will or irrevocable trust, read with the CBDT reason code used for transmission reporting since 1 January 2026. Accessed 16 September 2026.
• National Securities Depository Limited. “Official website, depository services,” nomination forms and transmission documentation. Accessed 16 September 2026.
• Central Depository Services (India) Limited. “Official website, depository services,” nomination forms and transmission documentation. Accessed 16 September 2026.
• Upstox. “Open a free Demat account,” nomination and account-opening flow. Accessed 16 September 2026.