• Gifting of shares

Sister can gift shares to brother, brother son , daughter,and brother wife etc 
Impact on income tax file brothers , brother son. , daughter ,brother wife etc after sale
Please clarify
Asked 18 days ago in Capital Gains Tax from Ghaziabad, Uttar Pradesh

I am assuming its a private share so you are going to transfer the shares certificate and you need to also prepare a gift deed for same.

Yes the receipt of such gift shall be tax free for all of the above mentioned person.

At the time of sale period of holding and cost shall be considered from the date it was held by the original owner.

 

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Naman Maloo
CA, Jaipur
3005 Answers
30 Consultations

5.0 on 5.0

The capital gain will be taxable in the hands of the sister.

Ruchi Goel Anchal
CA, Gurgaon
52 Answers

5.0 on 5.0

Dear sir 

In case of Gift of shares 2 act need to be seen-

1.income tax act 1961

2.companies act2013

 

1.so as per income tax received of shares by all the above recipient is exempt from tax.
but when they further sale the share then it will be taxable in the hands of receiver of gift.

for calculation of tax amount period of holding will be considered from the date of asset held by original owner & cost of shares will the price at which orginal owner acquired the asset.

 

2. As per companies act procedure for transfer of shares is as follows

1. Preparation of Gift Deed for transfer of Equity share or Preference Shares;

2. Delivery of Gift Deed along with share certificate by Donor in favour of Donee;

3. Gift Deed along with share certificate should be accepted by or on behalf of Donee;

4. Execution of SH-4 and payment of an adequate amount of stamp duty;

5. Delivery of duly Stamped, dated and execute transfer documents by gift, by Donor or Donee to the Company within 60 days from the date of its execution

 

so u need gift deed for the transfer & please comply with the companies act provision as well

 

if 

If u need help in compliance of above then u can contact me through phone consultation & I will guide u on same.

please rate 5& provide valuable feedback so that I can improve my answer in future

Poorvi Jain
CA, Indore
85 Answers
1 Consultation

4.8 on 5.0

Dear Sir,

 

Hope you are doing well !!

 

Gift from the relative is not covered in the taxable income in the hands of the recipients.

 

-It is advisable that prepare a gift deed for the same.

 

We may assist you in drafting gift deed.

 

Payal Chhajed
CA, Mumbai
4067 Answers
62 Consultations

5.0 on 5.0

We may assist you in preparation of gift deed and tax implications.

 

Payal Chhajed
CA, Mumbai
4067 Answers
62 Consultations

5.0 on 5.0

Hi,

 

Your brother, his son, daughter and wife will have to pay capital gain taxes (if any) at the time of sale of shares.

Lakshita Bhandari
CA, Mumbai
4521 Answers
273 Consultations

5.0 on 5.0

Yes, it's advisable to create a gift deed. All people receiving the gift should declare the same in theri ITR as an exempt income.


Yes, it's advisable to create a gift deed. All people receiving the gift should declare the same in theri ITR as an exempt income.

Lakshita Bhandari
CA, Mumbai
4521 Answers
273 Consultations

5.0 on 5.0

Hi,

- Gift of shares received by brother, brother son, brother daughter and brother wife is exempt in their hands. 

- It is advisable to draft a gift deed with each individual.

- Capital gain/loss arises at the time of transfer would be clubbed in your (sister giving gift) hands.

- Dividend received will be clubbed in your hands. Dividend is exempt upto Rs.10 lacs.

- No need to file ITR of the recipient if the Gross total income is less than Rs.2.50 lacs. It is a gift of shares and not money.

Vivek Kumar Arora
CA, Delhi
3456 Answers
197 Consultations

5.0 on 5.0

Hello,

 

A gift from a relative as per the income tax law would be exempt in the hands of the recipient. Such recipient of gift would be liable for tax on further sale of such gifted asset.

A proper gift deed should be executed.

I hope this answer satisfies your requirements.

 

Regards,

CA Hunny Badlani

Hunny Badlani
CA, Madhya Pradesh
1897 Answers
5 Consultations

5.0 on 5.0

For gift deed, you can contact directly or take a phone consultation.

 

Hunny Badlani
CA, Madhya Pradesh
1897 Answers
5 Consultations

5.0 on 5.0

- At the time of sale, cost in the hands of brother, brother son, brother daughter and brother wife would be considered as cost to the previous owner i.e. cost to the sister.

- You can take phone consultation if you have any other doubts.

Vivek Kumar Arora
CA, Delhi
3456 Answers
197 Consultations

5.0 on 5.0

Dear Sir,

 

As per the provisions of Income Tax Act 1961, there is no capital gain on transferring of shares to any relative as gift.

 

Definition of relative includes the following:

  1. Spouse of the individual

  2. Brother or sister of the individual

  3. Brother or sister of the spouse of the individual

  4. Brother or sister of either of the parents of the individual

  5. Any lineal ascendant or descendant of the individual

  6. Any lineal ascendant or descendant of the spouse of the individual

  7. Spouse of the person referred to in above points

 As per the above definition Brother, Daughter and Brother's Wife are relative but Brother Son is not a relative.

Accordingly gift given to Brother, Daughter and Brother's Wife are non taxable and shown as exempt income under the head other sources while filing the income tax return.

But in case of Brother's Son, Gift will be taxable and tax to be paid on the same while filing the income tax return.

 

Yes, gift deed needs to prepared at the time of gift, so that if can be considered as legal document and can be referred whenever required in future.

 

Thanks and Regards 

Divya Chugh

 

 

Divya Chugh
CA, Delhi
163 Answers
1 Consultation

5.0 on 5.0

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