Share Increase Limit

I do stock trading. And I get limit from my Bank against shares, which I can use for trading.

Question - I have a relative (not first relation) who is willing to transfer shares for short term. And I want to use his shares to get limit, and then return those shares after 4 to 6 months. Would there by any tax implication because of transfer of shares to my account.

Is there any way, I can transfer or get the limit for his shares on my name.

Hey @agoba79 ,

Capital gain tax shall be levied in case of transfer of capital assets such as shares. Transfer means sales, exchange or ownership rights from seller to buyer related to capital assets.

If the shares are pledged with broker or bank to avail trading limit benefits then it may not be treated as transfer and hence, capital gain tax may not be applicable. But, if shares are transferred to one accounts from another accounts then it shall be fall under the purview of capital gain tax. However, it is ambiguous and treatment may varies from experts.

In your case, you can also transfer shares through demat accounts by way of open-market or off-markets to beneficiary’s name.

You can also refer below article for more insights on capital gain tax treatment:

I hope, it helps! :slightly_smiling_face: