I hold some mutual funds and stocks in my demat. If I want to transfer them to my wife or mother how would the taxation be if they are sold in the future?
Hi @abhay1729
If you transfer your mutual funds and stocks from your demat account to your wife or mother’s demat account, it would be considered a gift as it is transferred without consideration. As per the provisions of the IT Act, gift to a relative is exempt from tax. A relative includes the spouse and mother of the assessee for the purpose of income tax.
Read more about Tax on Gifted Shares & Securities - Learn by Quicko
However, when your wife or mother eventually sells these mutual funds or stocks, they would be subject to capital gains tax.
If a mutual fund was purchased on 2020 , gifted on 2021 and sold on 2023, the long term gains will be on sell value(nav-2023)-purchase value( nav-2020) and the total tax will be paid by the gift holder(mother/spouse)?
Yes, you’ve rightly mentioned, the total tax liability will be paid by the person who has received the gift (mother/spouse).
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