Our Pvt Ltd Co is having parents and 4 sons and their wives as Directors. Each is holding shareholding pattern 10%. So Beneficial ownership is involved. Wives are transferring their shares to respective husband's. What is Taxation impact? Please guide.
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Beneficial ownership ..transfer...taxation
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Transferring shares from a wife to a husband as a gift is tax-free at the time of the transfer. However, under Section 64 of the Income Tax Act, any future dividend income or capital gains earned from these shares will be "clubbed" and taxed in the hands of the transferor (the wife). You should execute a formal gift deed and update the company's records to ensure the transfer is legally recognized.
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