Hey @Sanyam_Negi,
Gifts from non-relatives of monetary value of more than ₹50,000 are taxable in the hands of the receiver. The FMV of the shares would be taxed as ‘income from other source’ as per your applicable slab rate.
Hope this helps!
Thanks a tonne Surbhi.
One more query:
I need to take money from my friend of Rs 4Lakh. He doesnt have cash now but can transfer me shares.
So lets say he has shares of HDFC bank , current valuation being 4Lakh as of today 19April.
Q1: If he transfers me those ‘x’ number of HDFC bank shares to me, do I have to pay any taxes on those gifted shares?
Q2: If my friend, whose hdfc bank shares’ current valuation is 4Lakh, bought those shares at 3Lakh one years, need to pay tax on the difference of Rs 1Lakh?
Hey @Punit_T,
With regard to your queries,
-
As a ‘friend’ is not covered under the definition of relative under the IT Act, the gifted shares would be taxable in your hands. Hence, you’ll have to pay tax as per the slab rate on the monetary value of the shares on the day of transfer, i.e. ₹4 lakh.
Moreover, when you sell such shares, you will have to pay tax on the capital gains. The cost of acquisition and holding period will be calculated based on the previous owner, i.e. when your friend originally purchased the shares.
-
Gifts are not taxable in the hands of the sender, which means your friend is not liable to pay any taxes.
1 Like
Gifted shares are subject to capital gains tax (CGT) in most jurisdictions. The tax is calculated based on the market value of the shares at the time of the gift, minus any costs associated with acquiring them. If the shares have appreciated in value since acquisition, the recipient may be liable for CGT upon selling them. However, some jurisdictions may offer tax exemptions or reduced rates for gifted shares under certain conditions, so it’s essential to consult local tax regulations.
As per income tax gifts received from Spouse are exempt from tax.
I have received shares as gift from my spouse. Is there any limit on the value of gift received?
Also, i have STCL from trading in options.
Will be gain from sale of gifted shares be adjusted against the loss?
Is there any limitation to it?
Hey @Alpit_Bhandari,
Yes, gifts received from spouse are exempted from taxes irrespective of the value. However, in this case, clubbing provisions will be applicable and the capital gains on the gifted shares will be clubbed in the hands of the transferor.
Hi @Surbhi Ji,
Lets say ‘my friend’ transfers 50K worth of share to me and my mother.
Since upto 50K there is no tax,
- Please confirm if the sender ( my friend) doesnot pay any tax
- Receivers( me and my mother), dont need to pay any tax
Hey @Punit_T,
Yes, you are correct. Gifts up to a monetary value of ₹50,000 are exempted from taxes.
No, the sender of the gift is not liable to pay any taxes.
You will not be liable to pay any taxes when the shares are gifted. However, whenever you sell these shares the capital gains would become taxable.
Hope this clarifies.
hi @TeamQuicko ,
in last financial year, i have received 5 mutual fund portfolio from my wife through off market transfer, after few months in the same financial year, i have sent 1 mutual fund portfolio back to my wife, no mutual fund units were sold in the previous financial year. How to report the transfer on ITR form?, as i have received value (say 10 lakhs) from my wife and transferred value (say 2 lakhs) back to my wife account through off market demat transfer.
My questions:
- Do i need not mention the transaction as no realisation was involved?
or - Do I need to mention 10 lakhs in exempted income ,as gift is received from spouse?
or - Do I need to mention 8 lakhs in exempted income [after netting] ?
help is greatly appreciated. Thank you
Hello @A_K_RAGHAVENDRAN
Please find the answers as below:
-
Yes, mutual fund received by you from your wife of worth 10 lakh has to be reported as gift received in the ITR form. However, there will be no capital gains on the same.
-
You cannot net off. Your spouse needs to report 2 lakhs as gift received from your end in her ITR.
Thank you.
Gifted shares are taxed depending on their value and the circumstances of the gift. Under the Income Tax Act, recipients of gifted shares are responsible for declaring the value of the shares as income from other sources (IFOS) when filing their tax returns. Her shares received free of charge exceeding ₹50,000 are taxable. However, gifts from relatives, gifts due to marriage or inheritance are exempt from tax. All income from gifted assets, such as interest and capital gains, is subject to tax. If you sell the donated shares and make a profit, you will be subject to capital gains tax depending on the holding period.
Hi can you confirm how will the sender account for gifted shares?
I understand its not taxable but does the sender need to report these under capital gains as it would be reflecting under sender’s SFT/AIS?
If so, what should be the sale value?
Hey @Abhinav_Chhabra,
If the shares are being gifted, the transaction will not result in capital gains and hence, you are not required to report the same in your ITR.
But then there are chances of itr notice as there would be a mismatch with AIS
As this will not be considered sale of shares, the transaction should ideally not reflect in your AIS. However, if it does you can provide a feedback on the AIS portal.
Hi @Surbhi_Pal , I sent shares worth Rs. 10 Lakh to my mother this year and later after 4-5 months my mother sold those shares, I understand my mother needs to pay the tax on my cost price basis , My question are:
- As shares are already sold, do my mother needs to show them under schedule EI in her ITR ?
- You wrote a word clubbing provisions apply, what is that - is that applicable in this case(gift from son to mother)? , As my mother paid capital gain tax 15 % of the profit calculated by subtracting my purchase price from the selling price of her
Hey @Rishabh_Kapoor,
She can report the FMV of the gifted shares in schedule EI. Anyway, there’s no tax liability on this amount so it is better to disclose it.
Clubbing provisions will not be applicable in this case. Those are only applied when shares are gifted to wife, daughter in law or minor child.
Gifted shares are generally not taxed upon receipt. However, capital gains tax applies when you sell them, based on the difference between the sale price and the donor’s original purchase price.
Why FMV - as I am paying tax on cost basis for these gifted shares then why you want me to specify FMV in Schedule EI?
The fair market value exceeds ₹50,000, then the entire value of the shares will be taxable as IFOS.