Taxation on transfer of shares

Hi everybody,

if my father transfers shares purchased from HIS Zerodha account to MINE (Son), who will have to pay the STCG/LTCG whenever I (son) sell those shares from MY account?

The transfer of shares is normal and not in form of gift. both of us use Zerodha account.

Pls help, thank you

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Is the transfer without consideration? If yes, then I think it should be treated as a gift.

Without consideration as in?

As in if you’re not paying for the shares, then I think it should be treated as a gift.

No I didn’t pay for the shares. My dad purchased (payment as well) it in his DMAT AC and then transferred it to mine via CDSL.

We intent to do the same for future. Will either of us have to pay the STCG/LTCG whenever the transferred shares are sold?

My view is that the shares would be treated as a gift - on which there’s no gift tax applicable since it’s a transfer between immediate family.

When you do sell the shares, the capital gains would be applicable on you.

That’s what I think but I’m no expert. Maybe @Quicko can comment on this.

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Thanks Suyash

A parent can give any amount of shares, money to his children, they are considered as gift, and the capital gains or losses incurred from the gift are the child’s. So if you made profit after receiving them as gift, you pay tax.

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Hey @Viraj_Gawde,

As @Suyash.K has correctly answered, since the shares have been transferred by your father to you without any adequate consideration, it will be considered as gift given. Now, when you sell these shares, gain on transfer shall be taxable in your hands under income from capital gains.

To read more about it you can refer to this article: Tax on Gifted Shares & Securities - Learn by Quicko

Hope this helps!