We 3 siblings (2 brothers, 1 sister) are 3 joint account holders of a demat account with the 1st holder a US citizen with OCI and the remaining 2 account holders resident Indians. The demat account is linked to a joint bank account in the same 3 names, with the same first holder (US citizen with OCI). The demat account contains shares transferred after the deaths of our parents (through transmission, after obtaining necessary court documents) as we are the only 3 legal heirs. Each of us 3 owns 1/3rd of the shares in the joint demat account. As soon as possible, we wish to sell 1/3rd of the shares, transfer the proceeds to a US bank account of the first holder and transfer the remaining 2/3rd of the shares (1/3rd each) to the individual demat accounts of the remaining 2 holders in India. What is the most tax efficient way, assuming the total value of shares is 10 lakhs, between 10 and 20 lakhs or above 20 lakhs?
Hey @Adrian_212 ,
Any capital asset received from relatives or through inheritance is exempt as and when received. Here, shares are transferred after the death of parents and hence, said shares are received through inheritance process.
If, you sale the said shares in market and then only capital gain tax will be applicable. Here, one account contains OCI status out of three joint demat account holders. Hence, capital gain tax treatment should be followed considering the residential status first at the time of selling of shares.
You can also read below article for more insights about the tax treatment:
I hope, it helps!
Thank you Nireka and Kaushal!
Not sure what you meant by
“Hence, capital gain tax treatment should be followed considering the residential status first at the time of selling of shares.” Could you please advise on how this can be done to minimise tax? Could the 1st holder (US citizen/OCI holder) gift his 1/3rd of shares to either of the other 2 holders (sister or brother) in India and an equivalent amount of money be transferred to his US/India bank account?