You can gift the shares to your son without any consideration. It is advisable to execute gift deed for proof of record and future ITD reference.
Any shares transferred by way of gift to relative (here Son) is exempt from capital gain tax in the hands of transferor and transferee. But, capital gain tax triggers at the time of selling the shares by the recipient/transferee.
However, ultimate recipient is eligible to enjoy the original holding period of previous owner for indexation benefit to compute capital gain tax.
I got some money from my father which I know is directly exempt from tax. But do I need to declare that while filing a return? In that case, under which section do we need to file the return in the quicko application. A screenshot of the appropriate screen would be helpful.
Hi @pushpasooraj, money given from parents has to be declared under “Exempt Income” as mentioned in Section 56. Please refer to the following image to get an understanding where you can declare the money given to you by your father.
I want to know, when I (NRI) gave a gift to a specified relative (my Father), which is not taxable, but what are the tax implication in India when he want to sell some of those gifts .
For example, I gifted him gold items like a gold ring or a antique items like silver coins, old notes, old watches, now when he wants to sell them, will there be any tax implications ?
Thanks in advance for taking the time to seeing and replying this question.
Hey @Pankaj, the income received from the sale of said gifted items will be taxable at the hands of your father and the income that arises from the sale of such items will be deemed as income from capital gains. To determine whether it would be short term or long term capital gains, we would have to determine the holding period of the items. You can find more details from this article:
Thank you very much Maharshi, for a very quick and clear answer.
Also, one more thing, since there is no limit for gift from an NRI to specified relative in India, any gift whether less than 50,000 or more, should it be declared in PIT filing ?
Hey @shivankgarg98, capital gains tax would be paid by the person selling those shares. So, if your parents sell those shares, tax will be payable by them.
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.
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:
Hello,
I am a US Citizen and looking to gift appreciated US stocks to my parents who are Indian nationals. They will open a US brokerage account for this purpose. US laws allow gifting of upto $15k/yr to each individual without tax. I wonder if there will be any tax implication of receiving such stock for my parents?
Looks like lineal ascendents are considered relative and exempt from gift tax in India. However, I wonder if accrued capital gains on the appreciated stocks are also considered exempt?
In India, Lineal ascendants are considered relative and hence, gift received by your parents will be exempt. Although they are Indian nationals, If they are resident and ordinarily resident, then only income from capital gains will be taxable in their hands in India.
Actual Capital Gains on sale of shares are taxed in India. Accrued capital gains on the appreciated stocks are not taxed in India as it is notional.
I have gifted the share to my spouse. Then she sold the share. Why STCG and LTCG showing on my Tax P&L in zerodha? Should I consider this CG to my ITR or spouse ITR?
