Avoiding fines for late share transfers is crucial after selling on Meroshare as it preserves profits and ensures smooth transactions. So if you are wondering how to Transfer Share from Meroshare, we’ve got it covered.
In Nepal, investors and new investors have been fined for the late transfer share on Meroshare. The argument put forward by those who were punished is that they do not know how to transfer shares to the buyer.
Furthermore, fines for many investors have surpassed the gains from the sale of their shares.
According to CDS and Clearing, the most recent instance of this is when investors are asked to pay Rs 27 million in just six months, from July 2023 to January 2024.
Threshold
With the Trade Management System (TMS), investors can now purchase and sell shares from the comfort of their own homes.
Shares sold via this technique had to be transferred by the following day. When shares are transferred, they are taken out of the seller’s Demat account and deposited into the buyer’s Demat account.
After the shares are sold, the broker firm notifies the investors via text message on their phones that WACC and EDIS have verified the sale will go through.
After that, the broker company makes phone and email demands if the transfer is not finished by the next day.
On the other hand, a penalty equal to 20% of the shares sold for closeout must be paid by individuals who sell shares but fail to transfer them.
The buyer of the share receives the remaining portion of the fine, with the government receiving the remaining 25%.
Therefore, the seller of shares must pay a penalty of Rs 20,000 if the shares are sold for Rs 100,000 and are not transferred.
The individual who did not receive the acquired shares will receive the remaining Rs 15,000, with the government keeping 25% of that sum (Rs. 5,000).
If shares are transferred on schedule, a twenty percent penalty can be avoided.
After the shares are sold, a message will be sent to the phone, and the shares cannot be transferred from Meroshare until this message is received.
There are occasionally problems with the Meroshare online system as well.
During the transfer share procedure, some wiggle room is given in case of a technical issue.
How Do You Transfer Share From Meroshare?
The average cost of a company’s shares is represented by its WACC. Determining the WACC is therefore the first thing to do after selling the shares and before transferring shares.
The average cost per share of buying shares with broker commission is calculated after the WACC computation.
The shareholding period is created following the determination of the WACC. Only a 5% capital gains tax is applied to shareholders who keep their shares for more than a year; shareholders who hold their shares for less than a year are liable to a 7.5 % tax.
The system automatically displays the days of shareholding as a result. The shares are then transferred via EDIS after that.
Calculating WACC on Meroshare
First, the shareholder needs to use their Demat account to go into Meroshare and go to “My Purchase Source” to see which shares they have sold. This will allow them to calculate the WACC.
Following identification, the shares will be listed according to the acquisition date and method. Each share can be chosen using the checkbox on the left.
Every checkbox needs to be checked. Following this, the company’s purchasing price is noted.
Changes can be made following the need to modify the recorded pricing if necessary.
Following these modifications, the right-hand remark space should include an explanation of the reasoning behind the purchase price change.
These changes could happen especially in the event of mergers and acquisitions, “BO to BO” transfers, changes in household names, ownership transfers resulting from deaths, or the receipt of extra shares as a bonus or entitlement.
Otherwise, changing such a value would be illegal.
After self-declaring the average purchase price, proceed by clicking the ‘Proceed’ button.
Then, click ‘Declare’, followed by ‘Confirm Update’. This completes the process of announcing the sold shares’ price.
Determine the second holding period
To declare how long you’ve held onto your shares, start by logging into Meroshare and going to “Myholding” under “MyPurchase Source.”
Once your purchase source is announced and EDIS is obtained after selling, your list of holding companies will show up.
Choose a company to see the shares you have in your Demat account. You can pick dates to check how many days you’ve held each share.
Next, select the shares one by one or all at once from the list. The number of days you’ve held each share will appear in the next column. If there are any changes, adjust the days and add a note in the box provided.
Once you’ve completed this, click “Proceed” and then “Declaration” to officially declare the number of days you’ve held your shares.
EDIS (for transfer share on Meroshare)
Once you finish the WACC process and self-declare the holding period, head to the ‘My EDIS’ menu. There, you’ll find the Transfer Share tab.
You’ll see a list of tasks related to EDIS. Choose the one for transferring shares. Then, you’ll see the shares you’ve sold listed according to the sales bill.
You can select them individually or all together by clicking ‘select all’, then hit ‘proceed’.
After that, click ‘declaration’ and then ‘submit’. This finalizes the EDIS process.
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