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How to account the value of the transferred shares

gk (service) (156 Points)

31 July 2016

Dear Experts/Peers

I am an NRI and I have been transferred some of the shares I bought from the secondary market (listed in BSE/NSE) from my DP a/c. (NRE PIS a/c.) to my wife's DP a/c. How could I assign the value of these shares while considering my wife's IT Return. I mean some of the have been sold out from her a/c. In this case how could I consider the purchase rate of those shares.

Regards

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4 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 03 August 2016

If (trasferred means) sold to wife, price of transfer as of transfer date. If gifted, your purchase value, should be considered.

gk (service) (156 Points)
Replied 03 August 2016

Thank you Sir,

It is gifted, that means I could consider the initial purchase value - But this arises one more question, in such cases the date of initial purchase could applicable OR the transferred date, accordingly the IT return to be submitted on Short term OR long term capital gain, no?

Eg: My inital purchase was in 2014 Maarch, I have transferred in 2015 December and she sold (with profit) on 2016 February.

So I have taken the original Purchase date (2014 March) - the profit gained after 23 months & if I have taken the trasfered date (2015 Dec) - the profit gained after 2 months only! So here whether the profit gained shall be considfered as STCG or LTCG ? Please calrify.

Regards

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 03 August 2016

Holding period will be counted from the date of acquisition by donee.

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (160327 Points)
Replied 03 August 2016

Well, let me clarify a bit, I have taken total value of gifted shares less than 50K.

If the value at the time of gift were more than 50K, FMV (value of the shares on exchage, that day), is take cost of aquisition for Donee. As the period of holding is same as that of Donor, in both the case; the gains would be LT; and being Exempt, not to worry. Otherwise also the Gains are going to be clubbed into your account!!!