Can I Gift Mutual Fund Units held in SoA mode to my mother under relatives of the Income Tax Act?

Let us this transaction break into 2 parts.

1st Transaction - Gift of mutual Fund to a Mother :

Since Relative includes mother. As per sec 2(47) of Income Tax act 1961, Transferring mutual fund is not regarded as a transfer and hence, in Your hands Capital gain will be exempted.  Mutual Fund received from Son by way of gift will be exempted in hands of mother. 
Yes Mother can claim the exemption provided u/s 56(2)(x) of income tax act.

2nd Transaction - Subsequent Sale of units of mutual fund by a mother :

It will be treated as separate transaction. Mother will be required to file ROI u/s 139 of income tax act and need not to be included in your Income. Sale of units of mutual fund by a mother will attract a capital gain and period of holding starts from the day on which previous owner bought till date of sale and accordingly capital gain tax will be paid.

Thanks for your valuable reply .

May I know whether I can transfer Mutual Fund Unts kept under Statement of Account Mode (SOA) mode to another person's name without having to redeeming by me ? (As you know, equity shares kept in demat more can be transferred to another person's name by way of "OFF-MARKET" transfer Online...)

Yes, you can transfer units of mutual funds kept under statement of Account Mode(SOA) to another person without redemption, provided you have to follow certain terms & conditions before transfer. it is advisable to contact your broker app or platform. They can guide you to process of transfer.

Yes, you can transfer units of mutual funds kept under statement of Account Mode(SOA) to another person without redemption, provided you have to follow certain terms & conditions before transfer. it is advisable to contact your broker app or platform. They can guide you to process of transfer.

Hi Expert, My Sincere thanks for your reply.

Can you please clarify couple more points regarding capital gains on transfer / gifting of mutual fund units hld under ( SoA).

Detais of my doubts are marked and attached hereunder.

If you find time, please spare a few moments to see the attachment please.

My hearty thanks and warm regards,

Yes. A mother is a “relative” for Section 56(2)(x), so a genuine gift of mutual-fund units to her is not taxable in her hands merely because the units’ value exceeds ₹50,000. The gift should be properly documented and the transfer completed through the relevant fund house/RTA process; SoA units are not transferred by delivering a physical certificate.

On redemption, the units’ holding period and cost generally carry over from you to your mother under Sections 49(1) and 2(42A). Any gain is therefore computed with reference to your original cost and acquisition date, not the gift date. The redemption gain is generally taxable in your mother’s hands, not clubbed with your income: Section 64’s clubbing rules cover transfers to a spouse and certain other specified persons, but not a gift to a parent. The applicable capital-gains rate depends on the fund’s classification and acquisition/redemption dates.

Gift documentation and fund-house transfer records support the cost and holding-period trail needed when your mother later reports redemption gains. Manual tracking across gift, transfer and redemption records is difficult; automation can reduce repetitive work while professional judgment remains in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For help streamlining compliance workflows, connect with us on WhatsApp: https://wa.me/message/3HVOZ7HIY4ESC1