Currently me and my wife both are trading in options by pledging shares/MFs.
Once i become NRI, i will not have any income in india other than few FD income etc. Hence if i transfer all my shares and MFs to my wife account and then pledge and use margin for trading in options , how is the tax to be paid.
1st scenario - Wife pays income tax on her MF/share capital gain as well as Options income. Also she pays options income from the margin she gets from the MF/shares which i have transferred. And myself pay income tax only if there is capital gain form the MFs/shares which i transferred to her becasue of clubbing of income?
2nd scenerio - all tax she only pays…
any other scenario? what is the correct way of doing thing’s…i want to transfer to her account and pledge because if i do F&O as options in my accoutn as NRI, then i cannot pledge and also transaction charges are high.
Once the holdings are in your wife’s account, she will have to pay tax on any capital gain arising in the account. tagging @Quicko to provide more accurate details.
When you transfer MFs and shares to your wife there will not be any tax liability for you or her, it will be treated as a gift. When your wife sells the MFs and shares transferred by you to her, it will be treated as Capital Gains for her and she will have to pay tax on the same.
On all the options transactions done in her Demat account, she will have to pay tax on the profits.
how capital gain calculated here, The whole value of gift is treated as capital gain right?
comparing to if he kept the share and sells from his account he only have to pay capital gain from profit.
The husband will not have to pay any taxes when he gifts the shares to wife. When the wife sells the gifted shares, the purchase cost will be taken that of husband. The difference will be considered Capital gains.