Hey @shivam_ram:
In case of scrutiny, you could furnish this document to the ITD.
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 âIncome on Incomeâ. 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 âgiftâ from the definition of âtransferâ. 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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HiâŚ
I like to transfer some holdings to my brotherâs 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 âTransfer between specified family membersâ
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 helpsâŚ
Hi, While I see a lot of articles regarding transfer of shares I cannot find any article either here or on the internet on the transfer of Mutual Funds. Is it even possible? A website suggested that theoretically SEBI allows it but practically none of the AMC have a process for the same , so it isnt possible.
Can someone throw some light on this, I would want to transfer mutual funds units to my adult child so she pays any capital gains tax which would be lower than what I pay in most cases.
@Sakshi_Shah1 @Divya_Singhvi
Reading about it a bit more, I do see some articles including one on tatacapital website which clearly states that Mutual Fund units cannot be transferred except in the case of demise of the holder (in which case its called transmission). If this is true you might want to strike off the phrase âmutual fundsâ from your articles which speaks of tax on transfer of share & securities.
Hello @Vijay_Sharma
The term âtransferâ used for mutual funds relates to the term transfer as defined in the Income Tax Act. Transfer majorly indicates sale of units of mutual fund and does not literally mean just transferring units of mutual fund from one person to other. The taxability in case of transfer in form or sale or otherwise is the same as per Income Tax and attracts capital gains tax.
Coming to the part whether units of mutual funds can be transferred from one person to another, this depends upon the SEBI guidelines and how brokers follow it in practice. We would be able to help only from the aspect of understanding taxation on such transactions.
Hi, Thanks for explaining. Thatâs exactly what I am alluding to. If you read the article you wrote on gifting securities it mentions , and I quote âTrading platforms like Zerodha have built a platform to gift stocks, mutual funds and bonds after introduction of e-DIS (electronic delivery instruction slip) by CDSLâ
I think its misleading to suggest that Zerodha/CDSL (or any other platform) offers a facility to transfer the mutual fund units. If the only means to transfer MF units is to sell the units and transfer over the money to the donee then why would someone need any platform?
Hey @Vijay_Sharma
We have updated the content on the article âTax on Gifted Shares & Securitiesâ and removed the word mutual funds. Thank you for pointing it out.
Let us know if you have any other questions.
Till now I used to get all the income from my work in my parents bank account as I was below 18. Now Iâve opened my own bank account and will be investing that amount.
My parents transferred me 2 lacs and I read that income from relatives like parents arenât taxable so how and where do I need to show this income/gift from parents? And any conditions attached to this when any amount is transferred from a relative to us? Iâve confusion around this. Please help me clarify
And secondly what proof do I need to keep?
Yes, any amount received from parents is exempt. You can mention the amount received as a gift under the Exempt Income Schedule in your ITR. Since the amount you received is from parents the clubbing provisions will not apply to the income earned.
Make sure the amount is transferred from their bank accounts and is not deposited in cash.
Also, it is prudent to have a gift deed executed whenever you receive any gift for further documentation.
I want to gift my stocks to my adult son who is student and no income. Can I do that with zerodha account and simply gift him by opening his zerodha account? Is there any need to excute gift deed on stamp paper? And register or notorise ? What is tax treatment for me and him?