Tax on shares received as a gift

Income Tax Income from Capital Gains
174

Hey Surbhi,

As per your articles
" 1. Exempt incomes: There are some incomes specified in the Income Tax Act on which you do not have to pay any taxes. This includes gifts, agricultural income, interest from government schemes like PPF and SSY, etc. However, even if you do not have to pay any taxes on these incomes, it is mandatory to report them in the ITR under Schedule EI (Exempt Income)."

Should this be done in the receiver’s ITR filing.

175

Hey @Punit_T

As rightly mentioned in the articles shared by @Surbhi_Pal, all incomes which are not taxable (exempt) needs to be disclosed in ITR in Schedule-EI.

Hope this clarifies. Let me know in case of further concerns.

Thanks,
CA. Pulkit Garg

176

-Lets say my friend Jay bought 1200 shares of ‘xyz corp’ at Rs 2lakh on Aug 2023.
-On 1st Aug 2024 (1 year after purchase), 2000 shares of ‘xyz corp’ are worth Rs 16Lakh.

  • My friend Jay decides to transfer those shares to me on 2nd Aug 2024.
    Now two questions:
    a. Do I pay tax on entire Rs 16Lakh even if I dont sell those shares , while filing return in the month of July 2025.
    b. If I sell in Jan 2025, lets assume the shares are worth Rs 20lakh.
  • So , do I pay taxes on entire 20Lakh amount?
177

In Dec 24, my wife gifted me some stocks through Zerodha gift system. Now these gifted stocks by my wife are showing in Tax P&L as Short term realised profit and Long term realised profit in her portfolio. As far as I know, there is no tax liability if shares are gifted to spouse. Still, if we have to pay the tax, the recipient of the shares has to pay it and not the person who has gifted it.
Is there anything we have failed to understand??

178

Hi @Nishant ,

The Tax P&L from Zerodha may reflect the gifted shares as part of their transfer of shares in the report, but neither you nor your spouse need to pay taxes on the gift itself.

Now, let’s talk about clubbing of income in case of gifted shares. These provisions apply when spouses gift shares to each other, and the recipient earns income (like capital gains or dividends) from those shares. If the transfer was made without consideration or for inadequate consideration, the income will be clubbed with the giver’s income.

In your case, when you sell the gifted shares, clubbing provisions will apply, and the capital gains will be included in your wife’s income and taxed accordingly in her ITR.