I have a query regarding gifting shares. I have gone through few posts here & Quicko article on this but I have not received a clear picture.
A mother & her son (major) are both separate Zerodha account holders. Mother owns shares in her demat account that she held for more than 10 years. She wants to gift all those shares to her adult son. I have researched that such a transfer will not attract any income tax liability to either of them except for a nominal off-market transfer fee. My query is as follows.
Lets say the son sells the shares within a year of the gift transfer, say, in 6 months.
The capital gain would be LTCG since the original purchase date would be considered. Is this correct?
The LTCG will be taxable in the hands of the son & Clubbing Provisions of IT Sec 64 (or 60 or 61) would NOT come into play. Is this correct?
As a mother is covered under the definition of relatives in the Income Tax Act, any gift received would be exempted in your hands. Moreover, with regard to your queries:
For the calculation of the holding period, the original date of purchase would be considered.
Clubbing is applicable in the case of a minor child. Hence, here, clubbing provisions shall not apply.
Yeah I don’t understand why there is no simple answer to this. So much confusion. Hundreds of same question in this forum. Maybe quicko can create a video for their youtube channel explaining this.
Simple question:
I gift shares/ETF units to mother/wife/son/daughter.
They sell it (next day itself) out of their own knowledge/reasons/fear.
Income is under their tax slab or mine? I know acquisition cost/date are same but who has to pay taxes on this sale.
Clubbing provisions are applicable when shares are gifted to spouse, minor child or daughter-in-law. If the child is major (above 18 years of age) or you’re gifting shares to your parents, clubbing will not be applicable.
Whenever clubbing as applicable, the income shall be clubbed into the hands of the sender of the gift and they will be liable to pay taxes on it.