Transfer of shares

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 September 2011 HELLO FREINDS
HAVE A QUERY REGARDING TRANSFER OF SHARES.MY BROTHER INTENDS TO TRANSFER HIS SHARES TO MY NAME AS GIFT IN CURRENT FINANCIAL YEAR.KINDLY ADVICE THE IMPLICATIONS FROM TAX ANGLE.IN CURRENT FY HE HAS INCURRED A LOSS OF RS 80000.HOW WILL IT GET REFLECTED IN MY BROTHER'S I.T. RETURN.IF SHARES ARE TRANSFERRED TO MY NAME HOW WILL IT GET REFLECTED IN MY RETURN AND IN HIS RETURN TOO..QUICKLY REPLY IS HIGHLY APPRECIATED..THANKS IN ADVANCE..

CS Bijoy

CS Bijoy (Expert)
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03 September 2011 In case of transfer as gift just a gift deed is required to prepare.

Income tax will not attract because no consideration is received.

Querist : Anonymous

Querist : Anonymous (Querist)

03 September 2011 thank you sir..but i wanted to know how would it get reflected in both assessee's return and also the current year loss of Rs 80000 should be shown in whose name..need to be clear in these points...thanks..

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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02 August 2025 Great question! Here’s how it works in case of **gift transfer of shares** between your brother and you:

### 1. **Tax implications on gift transfer:**

* **Gift of shares**: No income tax on gift either for the donor (your brother) or the donee (you) at the time of transfer.
* A **gift deed** should be prepared and ideally registered (to prove the genuineness).

### 2. **Regarding the loss of Rs. 80,000 in current financial year:**

* The **loss incurred on shares** (like capital loss) belongs to the **owner of the shares at the time the loss arose**.
* So, if the loss happened while the shares were held by your brother, the loss is his.
* This loss can be set off or carried forward only by **your brother** in his I.T. return.
* Once the shares are transferred to you, any future gains/losses will be in your hands.

### 3. **How will this reflect in Income Tax Returns?**

| Person | Reflection in I.T. Return |
| --------------- | -------------------------------------------------------------------------------------------------------------------------------------------- |
| **Brother** | Report capital loss of Rs. 80,000 in current FY. No income from gift transfer. The gift itself is not taxable. |
| **You (donee)** | No income to report on receipt of gift. Shares will appear as inherited cost for you (cost of acquisition will be the cost to your brother). |

### 4. **Cost of acquisition for you:**

* For future capital gains calculation, your **cost of acquisition** will be the same as your brother’s (the person who gifted the shares).

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**Summary:**

* No tax on gift transfer itself.
* Loss of Rs 80,000 belongs to your brother (who held shares at loss time).
* You start holding shares at the acquisition cost of your brother for future transactions.

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If you want, I can also help draft a simple **gift deed template** for share transfer. Would you like that?

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