If the shares are received as a gift from a specified relative (such as parents, spouse, siblings, or children), the gift itself is generally exempt from tax, regardless of the value. However, when the recipient eventually sells those shares, capital gains tax will apply. The cost of acquisition and holding period are usually carried over from the original owner, so the capital gains are calculated based on the donor’s purchase price and purchase date, not the market value on the gift date. Also, if the gift is from a spouse, clubbing provisions may apply depending on the circumstances.