Offmarket Transfer of shares

Who has to pay tax transferer or transfer?

My friend is Transfering listed company Shares from the off-market sale, I am purchasing them through off-market, how is the tax treatment for that, who has to pay the tax l, how much tax, what documents should I maintain?

If, he transfers through GIFT what would be the TAX?

Hello @Aayushi_Sharma

Gift of movable property such as shares, ETFs, mutual funds, etc without consideration and exceeding Fair Market Value of more than INR 50,000 will be taxable in the hands of the recipient. This income should be reported under the head ‘Income from Other Sources’ in the Income Tax Return and tax should be paid at slab rates. The transferor of gift should have a valid source of income to justify the gift amount.

Sale of shares, ETFs, mutual funds etc received as a gift would be taxable as Income from Capital Gains. The recipient should file ITR-2 and pay tax at applicable rates.

Check out this article we have written in collaboration with Zerodha to know more.

Hi…

Myself, Ram and my brother Shyam maintain a Joint Demat account with myself Ram as First Holder and my brother Shyam as second Holder. The NSDL Demat account is with Stock Holding Corporation of India.

I like to transfer ONLINE some holdings from this Joint Demat account to my brother Shyam’s Demat account in which he is SOLE Single Holder.
Found these options under “Trade Reason” - (a). “Transfer to Own Account” (b). “Gift” (c). “Transfer between Specified family members” .

  1. My doubt is whether can I off-market transfer stating Trade Reason as “Transfer to Own account”, since my brother Shyam is second holder from where the share are to be transferred?

  2. Second doubt is whether should I select Trade reason as " Gift" and family relation as “Brother ( including Step Brother)?
    Can anyone please enlighten me the income tax implication on off market transfer by selection “Transfer to Own account” and " Gift” ?

Interestingly when tried to do Online off market transfer by selecting Trade Reason as “Transfer between Specified family members”… this off-market transfer is declined stating reason as “Please submit physical DIS for this off-market trade Reason”

Regards,

@Bharti_Vasvani can you help with this?

Hi…

Myself, Ram and my brother Shyam maintain a Joint Demat account with myself Ram as First Holder and my brother Shyam as second Holder. The NSDL Demat account is with Stock Holding Corporation of India.

I like to transfer ONLINE some holdings from this Joint Demat account to my brother Shyam’s Demat account in which he is SOLE Single Holder.
Found these options under “Trade Reason” - (a). “Transfer to Own Account” (b). “Gift” (c). “Transfer between Specified family members” .

  1. My doubt is whether can I off-market transfer stating Trade Reason as “Transfer to Own account”, since my brother Shyam is second holder from where the share are to be transferred?
  2. Second doubt is whether should I select Trade reason as " Gift" and family relation as “Brother ( including Step Brother)?
    Can anyone please enlighten me the income tax implication on off market transfer by selection “Transfer to Own account” and " Gift” ?

Interestingly when tried to do Online off market transfer by selecting Trade Reason as “Transfer between Specified family members”… this off-market transfer is declined stating reason as “Please submit physical DIS for this off-market trade Reason”

Regards,

Can You please enlighten me on this please

Hey @Desabandhu_Realtors,

Taxability won’t be attracted under both the options i.e. “Transfer to Own account” and " Gift”. As per the Income Tax Act, a gift in the case of ‘relative’ defined under the act is exempt. Tax will be levied when these shares are sold.

We stand out because of our expertise is taxes. Regarding your trading query it’s best to get in touch with your broker.
However, we’ll also try to get the answer with help of our broker partners.

Let us know if you have any further queries related to taxation.