gift of shares

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dipti t morajkar (Querist)
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07 March 2011 Kindly guide me on the following
One of the director of the company wish to transfer his shares by way of gift to his wife. Whether separate Gift Deed is to be executed? what is the stamp duty to be paid on the gift deed? What is the procedure to record the transfer in the company record?

Regards,

CA KRISHNA KUMAR DARUKA

CA KRISHNA KUMAR DARUKA (Expert)
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08 March 2011 1. It is better to execute a gift deed. But this gift is not taxable.
2. Stamp duty on gift deed is applicable as per state stamp duty schedule.
3. Normal procedure for recording share transfer is to be followed by the company.

Sunil Kr. Sanganeria

Sunil Kr. Sanganeria (Expert)
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08 March 2011 As per section 64(1)(vi) of the Income Tax Act, where an assest other than house property is transferred by an individual to his spouse other than for adequate consideration, any income from such assest is deemed to be income of the trasferor.

In your case, when wife will sell the shares and if she earned income on that, that income will be taxable in the hands of the husband.

But if she sold that share after one year(including the period of holding of husband)and stt is paid on that at the time of selling, such profit will be exempted u/s 10 and would not be clubeed in the hands of the Husband

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