Re-gift of gifted unlisted shares

You are correct that gifting shares to relatives is exempt from capital gains tax and income tax. However, there are some nuances to consider: 1. Exemption: Gifting shares to relatives (as defined in the Income Tax Act) is exempt from capital gains tax under Section 47 of the IT Act. 2. Clubbing provisions: When your Aunt gifts the shares to her son (your cousin), the income from those shares will be clubbed with your Aunt's income under Section 64(1)(iv) of the IT Act. This means that any income generated from those shares will be taxed in your Aunt's hands, not your cousin's. 3. Relative definition: The term "relative" includes certain relationships, such as spouse, parent, child, sibling, and certain lineal descendants/ascendants. Your father's brother's wife (Aunt) and her son (your cousin) qualify as relatives. 4. No tax implications: Since the shares are gifted to relatives, there will be no capital gains tax or income tax implications for either the transferor (you and your Aunt) or the transferee (your Aunt and your cousin). Keep in mind that tax laws are subject to change, and individual circumstances may affect the applicability of these provisions. Consult a tax professional or chartered accountant to ensure accuracy and compliance. Please note that the clubbing provisions under Section 64 may have additional