Tax on gifted shares, gold and property

Income Tax
21

Hi @M_Sridhar

If you report the LTCG from the sale of gifted equity shares as business income, it is incorrect.
Showing FnO & Intraday as business income is correct as they are considered as business income u/s43(5) of the IT Act.
Income from Business & Profession is taxed at the applicable slab rate. If you’ve been paying 30% tax, that means your annual income exceeds ₹10 lakhs under the old regime.

Rather, if you file it correctly now showing it as Income from Capital Gains, you can save taxes, as LTCG up to ₹1 lakh is exempt and is taxed at 10%.

22

In this thread, your team member Yash Kaviya says that “you can shift to choosing business income (instead of capital gain) if you pursue full-time trading”.
If this is true, it means LTCG can be included under business income, right?

23

Hi @M_Sridhar

Yes, as correctly mentioned by Yash, one can choose to show it as a business income if the person is a full-time trader.
However, it is advisable to consult a tax expert in such a regard, as there are some provisions that need to be adhered to.

If choosing to show your full-time trading as a business, then yes, LTCG can be included under business income.?

24

Thank you for your prompt response. I have specific questions regarding other topics too. I have written them down and made a PDF. Should I book a meeting on this Quicko website and ask them these questions on a video call? Or any other better way like email to get the doubts cleared? Thanks

25

Hi @M_Sridhar

So, you can book a MEET using this link (click here) and ask a tax expert for all your queries. The tax expert shall connect with you over an online video call and get your doubts cleared.

1 Like
26

just a quick follow-up qn on this. I have chosen to show my full-time trading as a business and hence pay LTCG tax under tax slab rate (no prob even if 30%)

If I decide to sell my gifted shares and incur LTCG, then this LTCG is still to be shown as capital gain (10% tax above 1Lak) and the self-made LTCG is to be shown as business income (tax slab rate), right?? Please give some clarity regarding this.

27

Hi @M_Sridhar

This will depend upon your intention to sell those gifted shares.
If you have held them for investment purposes, then they will be treated as LTCG.

28

Hi,
What are the tax implications if shares of above 50 Lakhs recieved from Wife’s Mother.

Can it be considered as gift from relative.

29

Hi @Ramesh_g

Yes, it will be considered as a gift from a relative. When filing your income tax return (ITR), you would need to report this gift as exempt income.
However, if you sell these shares in the future, capital gains tax will be applicable on the income received from these shares.

Read more about Tax on Gifted Shares & Securities - Learn by Quicko.

30

If I consider them as stock-in–trade, then I guess they can be treated as business income. In such a scenario, when I sell them, will the grandfathering concept (with Jan 31 2018) be applicable while calculating taxable income?

buy date & value : Jan 1 2017 and Rs.100000
sell date & value : Jul 7 2023 and Rs.300000
Jan 31, 2018 value: 300000 ( no price appreciation after Jan 31 2018)

If held for investment purposes, then taxable part of LTCG is zero I guess. But if treated as business income, what will be the taxable income? whether profits till Jan 31 2018 are exempted when treated as business income also? Thank you.

31

Hi @M_Sridhar

The grandfathering rule is used to determine the cost of acquisition to calculate the LTCG tax on equity shares and equity mutual funds that are listed and on which STT is paid.

Yes, if held for investment purposes, then the LTCG will be taxable after considering the grandfathering rule.

If treated as business income, the difference between the purchase price in 2017 and the sale price in 2018 will be taxable income at the slab rate.

Hope this helps.

32

HI . If i receive gifted shares from my Bhabhi. Do i have to pay taxes on that ?

33

Hi @Prince_Saharan

As per the law, a gift from relatives is exempt from tax.
However, in case you sell those shares, any gains/loss will be taxable under “Capital gains” income.

You can read this thread for a better understandig.

34

my maternal uncle wants to gift me .

either he gifts me his shares worth Rs. 2 lakhs or
he sells the shares and gifts me the money Rs. 2 lakhs .

which is the better choice from the above ; from tax point of view ?

what is the tax implications on both these scenarios for the giver and for the receiver ?

@Shrutika_Shah
@Sakshi_Shah1
@Laxmi_Navlani

35

If daughter-in-law gifts shares (exceeding value INR 50,000) to mother-in-law would this be taxable in the hands of the sender or the recipient ?

Would the treatment change if the daughter-in-law is NRI ?

thanks

36

Hi @Gopala_Krishnan

In this case, the transfer of shares (worth more than ₹50,000), is not taxable as they are relatives.

The treatment does not change even if the daughter in law is an NRI.

1 Like
37

Can you also clarify, if I gift Sovereign Gold Bonds or Gold ETFs to my adult children , they also follow the same rules as physical gold.

38

Hi @Vijay_Sharma

Yes, it applies the same taxability on gifting Sovereign Gold Bonds as physical gold. And the interest on such gold bonds will be taxable under Income from Other Sources (IFOS).

Hope it helps.

1 Like
39

Please inform where do you find the column for Gift received in money in your filing portal. I was unable to find it. Also deductions under section VI. So temporarily i have deactivated my account in Quick efiling. Please guide. The portal suggested ITR3. I am an individual and not a business organisation. Many sheets found in excel utility is missing in your portal.

40

Hi @Venkat

Gift income is considered exempt income, and you can easily report it under the “Income from Other Sources” (IFOS) section on the Quicko.

Here’s how you can add Income From Other Sources on Quicko.

If you still face any issues, let me know.