Tax on Gifting Mutual Fund and Shares from Son to Mother

Taxation
1

Dear Zerodha,

I have the following questions uncleared regarding Mutual Fund gifting and Stock Gifting.

Question: 1

I am a Son, wishing to gift my Mutual Funds to my Mom via CDSL to her demat account.

I have read one of the article in zerodha about gifting and taxation.
It says I, the Sender of gift stocks will not be liable for any income tax implications.

My doubt :
My mom will get the mutual fund units from me, value well above Rs. 50,000/-

  1. Will my mom, as recipient, be liable to pay income tax on that gift?
  2. What will be income tax implications for my mom and myself?

Question: 2

I and my mom, we both have Active Zerodha demat accounts. Wanted to Gift some shares and the value is also well above Rs. 50,000/-. My Mom will be liable to pay income tax on the gift?

I request you to reply to my queries as soon as possible.
Solving this doubt, coming from reliable source like you is very important to us.

Thank you.

2

@Quicko

1 Like
3

Hello @Karthinb, @Shiv_Katira,

Any gift received from a relative is considered exempt(not taxable) irrespective of the value of the gift.

In your case, both you being a gift-giver are not liable to be taxed nor your mother (who falls under relative definition) being a gift-receiver.

However, when your mother decides to sell the gifted Mutual Funds and Shares, she will be liable to be taxed. The cost of acquisition will be the price you paid to purchase the same and the holding period will be considered from the date you purchased.

Hope this helps!

2 Likes
4

Thanks for your clarification @Shiv_Katira @Quicko