Gifted shares cost

Others 124 views 2 replies

My grandmother had 1000 shares of rs 50/- each in her name (year 2000) so 50,000 rupees original cost

On death - 2023 - my father and my uncle received half each - so 500 shares each

Market price - 120 rupees 

My uncle gifted me 250 shares. 

What should I put as my cost? (should it be 120 rupees? / should it be 2018 fair market value? Should it be 0? Or other?) - from angle of taxability of I sell part / whole of the 250

 

 

Replies (2)
Gifted shares are valued at notional value or market value.
  • Under Section 56 (2) of the Income Tax Act, the recipient (you) is liable to be taxed for gifts of movable property (such as shares) without consideration and exceeding the fair market value of more than ₹50,000.
  • Exemption: Since you received the shares as a gift from your uncle, you fall under the exemption category (unless the FMV exceeds ₹50,000).
  • Proper documentation, such as a gift deed, should be maintained to justify the genuineness of the gift transaction
  • If you have decided to sell it, it would be cost basis


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