Hi experts,
Let’s consider this scenario.
A salaried individual already paid income tax on his earnings.
Every month he is transferring some money into his mother’s account. (Consider it as gift)
Mother is buying shares in delivery and selling after few days, thus making some profit. (STCG)
Overall profit on annual basis is less than 2.5 lakhs.
What’s the tax liability here?
Mother has her own trading account.
Pl see this “Tax on Gifted Shares & Securities - Learn by QuickoLearn by Quicko” Tax on Gifted Shares & Securities - Learn by Quicko
Since It is short term capital gains, 15% flat rate will be applicable on the Gains.
I think gifts between immediate family is tax free. The beneficiary will have to pay taxes only on her capital gains.
Hi @mac76, transferring of money to your mother’s account would be considered as a gift and hence not taxable. The profit made by your mother in her account will be taxable in her own hands and the income will not be clubbed. Hence the tax liability will be 0 as her total income is less than 2.5 lakhs.
if I transfer less than 2.5 lakhs (in one FY) to mother account. does she has to file ITR ? if she does not have any other income.
Hello @Private,
If the total income is less than basic exemption limit, there is no requirement to file ITR.