Is clubbing applicable on gifted shares?

Hey @Deeban_Thangavelu,

Not able to completely understand your question. However, I’ll clarify how clubbing works.

If you gift shares to your wife, whenever your wife sells those shares, the capital gains will be clubbed with your income and you will have to pay taxes on the same. Even, any dividend received on these shares will be taxable in your hands.

However, whenever such income is reinvested, thee income then arising is not subject to clubbing and hence, your wife will be liable to pay taxes on it.

Mam, let me get cleared with 1 example pls… i have transfered shares worth 10lakhs to my wife she sells that shares for 10L and reinvests 10L again in same shares thereafter if any CG or dividend comes then its here liablity to pay tax am i right.since there is no capital gain from the shares gifted by me and sold by her is also for same value there wont any capital gain for me.pls confirm my statement is right r not

Hi @Surbhi_Pal

My question is in extension to what @Patty has asked.

I’ve gifted securities anticipating benefits from long-term capital gains (LTCG). Typically, the receiver of such assets incurs the tax liability. However, since I transferred to my spouse, any sale profits or losses would ultimately be added to my taxable income. I had not realized this while making the transfer.

Now, would it be sufficient if I included these sell trades from spouse account related to gifted security as if they’re my own in my ITR ? Or should I do something else here ?

For e.g. I Gifted 100 qty of Equity XYZ to my spouse. I have LTCG and it already crosses 1 Lakh limit. Now, the entire 100 Qty is sold in my spouse demat account with STCL. Per my understanding, I have added both LTCG entry and STCL entry in my ITR now.

Kindly clarify

Applicable Income Tax.
I have X company 100 shares bought at 100rs, current price of share 10000 per share so current value 10Lakhs.
My wife Housewife, No income -
If I gift shares to her today, and sell the shares from her account what will be her tax liability? any tax liability to me ?
I assume, upto 7 lakh income zero? 1 lakh capital gain benefit she can take it? + standard deduction and rest all she can avail - and pay negligible tax or say zero tax?

Hi @rakeshkumarg,

In case of shares being gifted to your spouse, clubbing of income is applicable. This means that whenever your wife sells the shares, the profits generated will be clubbed with your income and you’ll be liable to pay taxes on it. I’ll merge your Query to a relevant thread where I have written about this in detail (refer to the first post).

This is the case for incomes taxable at slab rates, for example salary, where you get a tax rebate upto ₹25,000 and hence there’s no tax liability under the new regime. But, profits from shares are taxed at special rates and the new regime does not allow a rebate on special rate incomes. Thus, you’ll get the basic exemption and ₹1.25L exemption on the LTCG but the income exceeding this limit will be taxable.

Okay thanks, I have basic query still.
I bought shares at 100
Transferred to my wife account today when share price is 10000
She sells the share at 9000
So will 8900 still be my clubbed income ?
Or I need 1000 loss would be clubbed loss?

Regards,

Rakesh.

Hi @rakeshkumarg,

When your wife sells the shares, the cost of acquisition will be considered as per the cost at which the original buyer, i.e. you had purchased the shares. So in your case, there would be a profit of 8900 and this will be clubbed with your income.

If in case the share was sold at say 90, then there would be a loss and the same would be clubbed as well. Hence, you would be able to claim those losses.