user13642: I heard about it somewhere, but no where found a complete step by step solution.
I've heard that for addresses in the same wallet, the transaction fees can be avoided. Is it a rumor ?
If no, then please help on how to attain it.
By wallet, I mean to say the wallet that is being used by bitcoind/litecoind or bitcoin-qt/litecoin-qt on a machine. (they usually use the wallet.dat)

user12006: The network does not know if two addresses are in the same wallet or not.
Since the transaction fees are verified/received by the network, an inter-wallet transaction MUST be the same as an intra-wallet transaction, in every way.

user13700: To reply to your updated question: If you have two addresses in your wallet, and want to send coins from one of the addresses to the other, then you do have to pay fees. The network doesn't know whether two addresses in the same wallet. (Well, technically it could, if both addresses were used as inputs in the same transaction at some point, but I digress - in any case, the network doesn't care. Two different addresses are two different addresses.)

user85: A traditional Bitcoin wallet contains a bunch of private keys and a bunch of accounts. Each private key has a corresponding Bitcoin address.
For each private key that the wallet has issued, some account is associated with that key. This serves only one purpose -- it determine which account gets its balance raised when funds are received at that address.
Intra-wallet transfers require no transaction and thus pay no fee. I can switch from 10 Bitcoins in account "Jeff" and 0 in account "Judy" to 0 in "Jeff" and 10 in "Judy" just by swapping a 0 and a 10 inside the wallet. The Bitcoins remain at the same address, they are just credited to a different account.

13642: <p>I heard about it somewhere, but no where found a complete step by step solution.</p>

<p>I've heard that for addresses in the same wallet, the transaction fees can be avoided. Is it a rumor ?</p>

<p>If no, then please help on how to attain it.</p>

<p>By wallet, I mean to say the wallet that is being used by bitcoind/litecoind or bitcoin-qt/litecoin-qt on a machine. (they usually use the wallet.dat)</p>
 12006: <p>The network does not know if two addresses are in the same wallet or not.</p>

<p>Since the transaction fees are verified/received by the network, an inter-wallet transaction MUST be the same as an intra-wallet transaction, in every way.</p>
 13700: <p>To reply to your updated question: If you have two addresses in your wallet, and want to send coins from one of the addresses to the other, then you do have to pay fees. The network doesn't know whether two addresses in the same wallet. (Well, technically it could, if both addresses were used as inputs in the same transaction at some point, but I digress - in any case, the network doesn't care. Two different addresses are two different addresses.)</p>
 85: <p>A traditional Bitcoin wallet contains a bunch of private keys and a bunch of accounts. Each private key has a corresponding Bitcoin address.</p>

<p>For each private key that the wallet has issued, some account is associated with that key. This serves only one purpose -- it determine which account gets its balance raised when funds are received at that address.</p>

<p>Intra-wallet transfers require no transaction and thus pay no fee. I can switch from 10 Bitcoins in account "Jeff" and 0 in account "Judy" to 0 in "Jeff" and 10 in "Judy" just by swapping a 0 and a 10 inside the wallet. The Bitcoins remain at the same address, they are just credited to a different account.</p>
