in CDSL there is “Transfer b/w specified Family member” option but generally ppl use Gift to family member.
Either way, transfer to this relative is exempt from GIFT Tax even if you gifted. But if you are able to show how you borrowed, then you can show this as return of loan and principal isn’t taxed. (by show, it means if there is inquiry/notice, you can prove that’s all)
LB pay outs are actually dividends (even though not cash but units) and they deduct TDS, so whatever income in FY is generated by the holder, that amount in cash terms should be added to individual’s income and if there is tax liability, should compute accordingly.
in this thread, i posted on taxation.