Converting NRO to Resident account-Taxation rules

Once I return back to India and want to convert my NRO demat account to Resident account (within Zerodha), I understand that Zerodha would close out my existing NRO account and create a new Resident account and transfer securities. I would like to understand some practical things.
1- Does Zerodha sell all existing securities and buy again through new account?
2- What is the Tax implication on this transaction; If securities are sold from old NRO account to be able to transfer to new account, is it considered as profit booking (short term/long term) ?

@AkshayAtur can you.

Yes. It is the responsibility of the NRI to inform the change of status to the designated authorized dealer branch, through which the investor had made the investments in Portfolio Investment Scheme and the DP with whom he/she has opened the demat account. Subsequently, a new demat account in the resident status will have to be opened, securities should be transferred from the NRI demat account to resident account and then close the NRI demat account.

I found this in NSE website.
My humble suggestion is to consult with your tax advisor.

In your query, you mention that you wish to convert NRO demat account to resident. I do not think there will be any tax implication as NRO is deemed as resident and taxed. Dont you have NRE demat?

Thanks for the link Neha.
I don’t have NRE demat but just have NRO Non-PIS account.

All my investments are long term in nature and I don’t want to sell and buy in between and face Tax implications just because by resident status is changed (due to transfer of securities).
So it means I would never be able to plan long term investments (>10yrs) if I keep changing my resident status due to this transfer transactions. Correct me if my understanding is wrong.

Hey, There’s no need to sell your holdings if your Residential Status changes.

Nope; The demat account isn’t closed now, there is an option to convert the account status from Resident-NRI and vice versa. Only the trading account is closed.
The shares remain in the same account and once the resident trading is opened the holdings get mapped to this new account.

There’s no tax implication. No transactions {sell from old & buy in new} doesn’t happen.