Part of the guide: How Indian stock markets work: exchanges, brokers, depositories and settlement
MarketsWhat is T+1 settlement? How Indian equity trades settle
T+1 means a trade settles one working day after it is made. What settles, why it matters for dividends and record dates, and how it differs from the older T+2.
Settlement is the final step of a trade, when money and shares actually change hands. In India, equity trades settle on T+1: the trade day (T) plus one working day.
An example
You buy shares on a Monday. Under T+1:
| Day | What happens |
|---|---|
| Monday (T) | The trade is done on the exchange. |
| Tuesday (T+1) | Money moves out of your account and the shares are credited to your demat account. |
If a market holiday or weekend falls in between, the count skips it: a Friday trade settles the following Monday.
What changed
India earlier used T+2 (trade day plus two working days) and, before that, longer cycles. Moving to T+1 shortened the time between trade and delivery of the shares. Rules for the settlement cycle are set by SEBI and the exchanges.
Why it matters for dividends and other actions
Companies fix a record date: the day the register decides who receives a dividend, bonus or rights. You must be on the register on that date. Because shares now settle in one working day, a share bought on the day before the record date reaches your demat account in time, and the ex-date, the first day the shares trade without the entitlement, falls on the record date itself. See corporate actions explained.
Practical points
- The amount is debited when the trade settles; your broker’s statement shows the settlement date.
- The shares are yours once credited; they sit with the depository, not the broker.
- Selling works the same way in reverse: shares leave your demat and money is credited on T+1.
For the whole chain from order to settlement, see how Indian stock markets work.