FCS Deepak Pratap Singh
Quick Summary
As you are aware that Gift is transfer of movable or immovable property by one person to another persons without consideration or in lieu of love or affection. The sale consideration or transaction value in case of Gift will be nil and hence there is no Capital Gain Tax in hand of donor of the gift.
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FAQ :
No, the donor is generally not liable for capital gains tax on gifted shares. This is because a gift is considered a transfer without consideration, and capital gains tax applies to transfers with a sale consideration. Gifts are also excluded from the definition of 'transfer' under Section 47 of the Income Tax Act.
A gift of movable property, including shares, is taxable in the hands of the recipient under Section 56(2) of the Income Tax Act if its fair market value exceeds Rs. 50,000 in a financial year. This income is reported under 'Income from Other Sources'.
Yes, gifts of shares are exempt from tax for the recipient in certain situations. These include gifts received from specified relatives, gifts received on the occasion of a marriage, and gifts received by way of inheritance.
To transfer shares by gift, a registered Deed of Gift must be executed. This deed, along with the Share Transfer Form and Share Certificate, should then be sent to the company for registration in their Share Transfer Register and Register of Members. The gift is considered complete upon handing over these documents to the donee.
When gifted shares are sold, capital gains tax is applicable. The holding period for determining short-term or long-term capital gains is counted from the date the previous owner acquired the shares. The cost of acquisition is considered the original purchase price paid by the previous owner.
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