Buy Today Sell Tomorrow (BTST) transactions are settled by first crediting shares to your demat account on the day they are received from the Clearing Corporation (CC) and earmarking them for delivery on the same day against the sale of the stock that has already been carried out.
Settlement process
- Zerodha receives your purchased shares from the Clearing Corporation.
- Your shares are credited to your demat account.
- Zerodha earmarks these shares against your sale transaction.
- Your shares are debited from your account for settlement delivery.
Example scenario
Here's how a typical BTST transaction settles:
- You buy 100 shares of Reliance on Monday and sell them on Tuesday.
- Following the T+1 settlement cycle for your purchase, the shares will be transferred to your demat account on Tuesday.
- On Tuesday, Zerodha earmarks your 100 Reliance shares against the sale you made on Tuesday.
- Your shares are debited from your account towards settlement on Wednesday (T+1 from your Tuesday sale).
This settlement method ensures you receive credit for all corporate actions directly in your name. Additionally, any TDS deducted for dividends appears against your PAN in your 26AS instead of the broker's PAN. Since shares are credited and debited from your demat account, DP charges apply like normal delivery transactions.