Transfer of bonds using "CDSL reason code 31: Transfer between specified family member

Bonds
1

Hello,

I am planning to transfer bonds using CDSL reason code 31: “Transfer between specified family members.”

The scenario is as follows:

  • The transfer is between members of the same HUF.
  • The grandson is the transferee, but his name is not explicitly mentioned in the existing HUF affidavit.
  • I understand that as per the law, the grandson is automatically considered a member of the HUF.

My specific questions are:

  1. Will the existing HUF affidavit (without the grandson’s name) suffice for compliance, or would a revised affidavit explicitly including his name be required?
  2. What specific proof/documentation is needed to establish the relationship as per CDSL guidelines for reason code 31?
  3. Will this transfer be considered tax-exempt under the applicable laws?

Thank you for your insights and assistance!

2

Are you transferring from HUF account to grandson or from your personal account to grandson’s account

3

Individual demat account to grandson’s individual demat account

4

  1. Will the existing HUF affidavit (without the grandson’s name) suffice for compliance, or would a revised affidavit explicitly including his name be required?
    We would recommend you get the HUF deed updated with the new member.

  2. What specific proof/documentation is needed to establish the relationship as per CDSL guidelines for reason code 31?
    No documentation is required to establish the relationship between the sender and receiver for DPs. The CDSL system does not perform checks when a transfer request is placed with the reason code ‘transfer between family members’.

  3. Will this transfer be considered tax-exempt under the applicable laws?
    Regarding the taxation, it is advisable to consult your respective auditors.

5

Then just gift it. Gifts are tax free