Please advice on this scenario. I gift shares to my spouse and she uses that to plege and trade in f&o. Loss or Proft will be clubbed in the hands of sender or receiver (spouse)
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Can someone please help with this query?
Should I disclose the gift stock received during ITR filing?
I have received the gift stocks/shares(still holding) from my mom which is worth of 23,000 ? Do I need to declare while filing the ITR? If yes, explain.
Thanks advance.
Hey @gvinaycse, Gift of movable property such as shares, ETFs, mutual funds, jewellery, drawings etc without consideration and exceeding Fair Market Value of more than INR 50,000 is taxable in the hands of the recipient under Section 56(2) of the Income Tax Act. Such income should be reported under the head Income from Other Sources in the Income Tax Return and tax should be paid at slab rates. Taxes on the gifting of shares are exempt in the following situations:
- Individual receiving gift from a relative (including siblings, spouse and lineal ascendants or descendants)
- Individual receiving gift on the occasion of marriage
- Gift received by way of inheritance.
Sale of shares, ETFs, mutual funds, etc received as a gift would be taxable under the head Income from Capital Gains. The recipient should file ITR-2 and pay tax at applicable rates.
Dear Mates,
Would like to know whether transfer of share as a gift to parents attract any tax in the hands of sender/receiver.
Thanks in advance!
Hey @RK07, if the monetary value of shares & securities is up to INR 50,000, such gift is exempt from tax at the hands of the receiver. Moreover, the sale of shares & securities is not taxable in the hands of the sender of the gift.
Hi,
I have gifted the shares to my spouse. I like to know what information should be mentioned in ITR. Consider the below arbitrary example for considering the taxation.
Purchased 50 shares @ 2000 on 01/01/2020 by me.
gifted 50@4000 on 01/01/2021 to the spouse.
Sold 50@5000 on 01/02/2021 by the spouse
Capital gain will be 50 * 3000 = 150000
Now, this 150000 as capital gain will have to club under my income and it will be LTCG.
What will be the spouse’s income in such a case? Is it 150000 or 50 * 1000 = 50000.
What information wife has to show while filing ITR?
Like 50*4000 as exempt income and what about the capital gain?
Next time gain arises by investing 150000 or 50000, I do not want to club it with my income. Is it possible?
Hi, I read your article and it says,
It is very important to maintain proper documentation for gift transactions. It is advisable for the sender and receiver to maintain a registered a gift deed as a proof of the gift transaction. In cases of scrutiny, this document can be used to justify the genuineness of the gift transaction and avoid charges for tax evasion.
Could you please tell me how can we keep track of it? I have received shares as gift in zerodha account and we have email regarding it, is there anything else we have to consider as a proof?
Since you have charged 4000 from your spouse, the clubbing provision will not apply. You need to pay tax at the applicable rate on capital gains on (4000-2000). Your spouse will also have to pay capital gain tax on (5000-4000).
Just for information, the clubbing provision does not apply to “Income on Income”. So any income she earns will be taxable to her only.
Hope this helps 
Hello,
My friend got IPO of SBI Cards on 16th March 2020.He transfer these shares to me on 29 Aug/1Sept 2020.
(i)Purchase Price - 755Rs. @ 19 Shares = 75519=14345
(ii) Purchases Date - 16 March 2020
(iii) Sale Price - 904Rs. @ 19 Shares = 90419=17176 (Sold by Receiver)
(iv) Sale Date - 5 Jan 2021
(A)What is the treatment of tax in the hands of sender and receiver if there is no gift deed just a normal transfer of share from one friend account to another friend account?
(B) We both have an account with angel,It shows the loss of 14,345Rs in the sender account.It shows the zero sell value of shares and treated full amount as a loss.
(C) What should ne the right treatment of tax in the hands of sender as well as receiver?
Here I attched Screenshot on report of angel-
Hey @LokeshJangid,
Shares are property other than immovable property, hence, gift of shares received from a non relative by an individual will be taxable as per section 56(2) of the Income Tax Act, 1961. As per the said section, gift of property received, FMV of which is upto Rs.50,000/- will not be taxable. Once the FMV exceeds Rs.50,000/-, the whole value will be taxable as Income from Other Sources in the hands of the receiver and taxed at slab rates.
So, in your case, you need to calculate the FMV of SBI Cards shares as on 29th August 2020. If the FMV value is below Rs.50,000/-; then the gift amount will not be taxable in hands of receiver. It would be tax free.
The receiver will pay Capital Gains on the sale of shares and ITR 2 will be filed. The cost of acquisition, date of acquisition will be that of previous owner for the purpose of calculation of capital gains at the time of sale by the receiver.
The sender of a gift is not liable to pay income tax on such transaction.
Since the Gift Tax Act (GTA) was abolished the sender is not liable to pay any tax on gifts.
As per the Income Tax Act, Capital Gains would arise on the transfer of a Capital Asset. However, Section 47 specifically excludes ‘gift’ from the definition of ‘transfer’. Thus, the sender of a gift is not liable to pay income tax on such a transaction.
Further, it is advised that gift deed is prepared and you may contact the angel team to know the reason behind their treatment of the transaction as a loss transaction.
I understand that income on gifted shares in clubbed in the hands of the one who gifts. I have a question about tax liability arising from below scenario:
- Husband donates shares to wife
- Wife sales shares - capital gains tax to be paid by husband
- Wife utilizes amount received by selling shares for running business.
- What is the tax liability on income arising from such business?
Thanks,
Kailas
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Hey @kailasdp2000
As per the Income Tax Act, Income arising from income of gifted money is not supposed to be clubbed in the hands of giver. Hence, in the scenario you mentioned, business income will be taxed in hands of wife if she has invested her capital gains in business.
Hope it helps.
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Hi…
I like to transfer some holdings to my brother’s daughter Demat account from NSDL ( Stock Holding Corporation of India Ltd.,)
Found two similar options under reason for transfer - Gift and Transfer between specified family members (self and spouse linear ascendants/descendants ).
Can anyone please income tax implication on Gifting and “Transfer between specified family members”
Regards,
Hi @Desabandhu_Realtors, when you transfer the shares to a specified family members it is considered as a gift and there shall be no tax implication on the transfer. However, when the person who has received the gifted shares sells it, the tax shall be calculated from the original date of buying.
Hi,
I gifted 1000 share to my mom, buying price 100 and while gifting the price was 120. hence the profit of Rs. 20000 shows in my tax PNL report. as per the tax rule I am not liable for paying tax on this as it a gift to a relative.
If my total PNL shows 2 lac in the tax PNL which includes this 20000. when i file my return do i need only show 180000 and ignore this 20000 in capital gains?
Correct, your capital gains would only be 1.8 lakh and you must ignore the 20k as it is only a notional profit on the shares gifted.
Hope this helps…