Tax Implications for Transferring Stock to Spouse

Income Tax
1

If I transfer stock/funds from my account to my spouse account using CSDL Easiest portal, will there be any Tax implications for my spouse. per my understanding gift or transfer within family there is no tax implication for receiver if it is within family. please confirm

2

Hey @Venkatesh_Gandham,

As spouse is covered under the definition of relatives as per the IT Act, gifts received would not be taxable.

However, in this case clubbing will be applicable when such shares are sold.

3

In many jurisdictions, transferring stocks or funds between spouses is often considered a non-taxable event, especially if the transfer is considered a gift or part of a family arrangement. However, tax laws vary depending on the country and region, so it’s essential to consult with a tax advisor or financial expert familiar with the specific regulations in your area. They can provide accurate guidance on any potential tax implications for your spouse related to the transfer of assets.

4

Hello, Please consider an assumed case as given below and confirm tax applicability.

  1. Stock bought by husband of value - 1,00,000
  2. Stock appreciated value after 1 year – 2,10,000
  3. Full stock transferred and sold in spouse account after 1 year of value – 2,10,000
  4. Stock rebought in spouse account after one day from sale – 2,10,000
  5. Stock sold by wife after one year at appreciated value – 3,20,000
  6. LTCG for sale transaction considered in step 3 to husband = 2,10,000 – 1,00,000 = 1,10,000
  7. LTCG for sale transaction considered in step 5 to spouse = 3,20,000 – 2,10,000 = 1,10,000

All income arising out of 2,10,000 invested by spouse after LTCG payment by husband as shown in step 6 will be liable to spouse only. Is that correct?

5

Hey @Anand_Kamdar,

Clubbing will be applicable on the gains arising on stocks that were transferred to your spouse.
However, yes, when these gains are reinvested, the gains will not be subject to the clubbing provisions and your spouse will be liable to pay taxes on the same.

6

Gains reinvested will include initial amount invested by husband 1,00,000 and profit from appreciation 1,10,000.
2,10,000 is reinvested in spouse account.

CG arising due to appreciation of 2,10,000 reinvested will be subject to only spouse or husband will be liable for CG arising from 1,00,000 and spouse will be liable for CG arising from 1,10,000?

7

Hey @Anand_Kamdar,

The spouse will be liable to pay the taxes on the gains from the entire ₹2,10,000 invested.

8

Hi,
Can you please confirm if CG liability shown below is correct?

Transaction Person Amount Period Capital Gain
Stock Bought Self 1,00,000 01-04-2024
Stock transferred Spouse 1,00,000 10-04-2024
Stock sold Spouse 1,10,000 15-04-2024 10,000 STCG to self
Stock rebought Spouse 1,10,000 20-04-2024
Stock sold Spouse 1,20,000 25-04-2024 10,000 STCG to spouse
Stock rebought Spouse 1,20,000 30-04-2024
Stock sold Spouse 2,30,000 30-05-2024 1,10,000 LTCG to spouse
9

Yes, your understanding is correct.

10

Hi,
Can you please confirm if CG or CL liability shown below is correct?

Transaction Person Amount Period Capital Gain / Loss
Stock Bought Self 1,00,000 01-04-2024
Stock transferred Spouse 1,00,000 10-04-2024
Stock sold Spouse 90,000 15-04-2024 10,000 STCL to self
Stock rebought Spouse 90,000 20-04-2024
Stock sold Spouse 1,20,000 25-04-2024 30,000 STCG to spouse
Stock rebought Spouse 1,20,000 30-04-2024
Stock sold Spouse 2,30,000 30-05-2024 1,10,000 LTCG to spouse