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transfering of shares by way of gift

smita kale (Finance person) (47 Points)

25 February 2011

Hi,

I want to transfer some part of shares from one director to another director by way of Gift.

Can any one assist me in giving complete guidline on the same.

I want to know the procedure of gifting the shares from start to end.

Thanks

Smita

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10 Replies

Jaideep (Service) (1368 Points)
Replied 25 February 2011

Hi, Smita

Execute Gift Deed and get it registered with Company. The procedure for registration of shares gifted is same as the procedure for a normal transfer. The stamp duty payable for registration of gifted shares would be @ 25 paise for every Rs 100 or part thereof, of the face value or the market value of the shares prevailing as on the date of the document, if any, conveying the gift or the date of execution of the transfer deed, whichever is higher.

Regards

Jaideep Pandya

smita kale (Finance person) (47 Points)
Replied 25 February 2011

Thanks Jaideep for your prompt reply.

Could you please guide me on procedure of tansfer of shares.

Smita

Jaideep (Service) (1368 Points)
Replied 25 February 2011

For transfer of share follow normal procedure using Transfer Deed..................

Regards

smita kale (Finance person) (47 Points)
Replied 28 February 2011

I assume if we have to transfer shares via gift then we have to prepare Gift deed as well as Transfer deed.

If it is right then please let me know do we have to affix stamp duty of 25 paise for every Rs 100 both on gift deed and transfer deed.

Jaideep (Service) (1368 Points)
Replied 28 February 2011

Dear Smita,

Stamp duty of @ 25 paise for every Rs 100 or part thereof has to be paid on transfer deed as per Companies Act and rules thereunder.

As per my knowledge, Gift deed can be prepared on Rs.100 non judicial stamp paper. Here stamp duty will be applicable as per Gift Act.

Regards

Jaideep Pandya

smita kale (Finance person) (47 Points)
Replied 28 February 2011

If i prepare a gift deed on stamp paper of Rs.100 then i think the value of stamp duty on gift is Re. 1 for every Rs. 10,000 or part thereof (approx. 0.01%).

Please confirm if some where i am going wrong.

Jaideep (Service) (1368 Points)
Replied 28 February 2011

Originally posted by : Jaideep

Stamp duty of @ 25 paise for every Rs 100 or part thereof has to be paid on transfer deed as per Companies Act and rules thereunder.

As per my knowledge, Gift deed can be prepared on Rs.100 non judicial stamp paper. Here stamp duty will be applicable as per Gift Act.

Bost has to be paid seperately...for stamp rate on gift, will be as per stamp duty prevailing in that state...

Nitin Mehta (Advocate) (27 Points)
Replied 30 August 2011

Jaideep is right with respect to 025% and Rs. 100 is concerned.

There is no gift Act at present and therefore there is no additional stamp duty as per that Act.

Even otherwise the stamp duty was never driven by Gift Act

vijayaggarwal (CA. IN PRACTICE) (89 Points)
Replied 27 April 2012

Gift deed shall be executed on stamp paper according to the respective State Stamp Duty Act. e.g. in case of Rajasthan, Gift deed shall be executed on stamp paper valuing 0.5% of market value of Share.

Further The stamp duty payable for registration of gifted shares would be @ 25 paise for every Rs 100 or part thereof, of the face value or the market value of the shares prevailing as on the date of the document, if any, conveying the gift or the date of execution of the transfer deed, whichever is higher.

suresh vaish (AGM) (21 Points)
Replied 12 January 2015

I want to know if the transfer duty is applicable for gifting of shares in Demat form also. I believe that it may not be required to be paid. Also is it necessary to get the gift deed registered in case I gift my shares to my mother. What will be the tax implications in this case for me as well as my mother.