Hi @S_Gupta,
If the shares allotted in an IPO are sold from a minor’s demat, the capital gains will be clubbed in the hands of the parents.
@Surbhi_Pal - I have a query in continuation, to the question on taxation aspect on LTCG, once the minor turns 18.
Suppose, on turning 18 - son/ daughter doesn’t have any other income (from salary / business) and partial redemption / selling is done of the securities (that are eligible for long term capital gains taxation) that were gifted by me as a parent (before they turned 18).
I am assuming the clause of clubbing income with parent will no longer be there after the child turns 18. Do they have to pay 0 tax on their PAN, until the basic exemption limit of 4 lacs of income from LTCG?
Or is the LTCG is not included in the basic exemption limit, assuming there are no other income the son/daughter may have - will they still have to pay 12.5% LTCG tax (even if they have 0 income from any other means)?
Thanks,
Manoj
Hello @bmkmanoj
Once your son/daughter turns 18, the clubbing provision ceases, and any LTCG from selling securities will be taxable in their hands. From FY 2025-26, income up to ₹4 lakh is exempt from tax. If your child has only an LTCG income of ₹4 lakh, they will not have to pay any tax. The basic exemption limit of ₹4 lakh applies, and for listed shares/equity mutual funds, an additional ₹1.25 lakh LTCG exemption under Section 112A applies. This ensures that no tax is payable on LTCG up to ₹5.25 lakh in the absence of other income.
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@Swapnil_Agarwal Thank you for sharing your inputs, appreciate it 
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