Tax Implication of transfer of shares from jointly held demat account to Singly held demat account

This issue shall be settled by 'economic ownership' & not 'legal ownership' of these listed shares.(assuming that shares are listed.) I am assuming that as 2nd holder, you contributed to purchase cost in some ratio; if not (full cost was borne by your brother), you will not have any tax implication. Also, since you have not mentioned amount of consideration for the proposed shares transfer, this seems to be  a gifting arrangement.

Assuming that you paid for purchase cost in some ratio,  this shall be a gift from you to your sister-in-law, since your brother shall be common in both demat accounts. This shall be an 'off-market' transaction (from demat to demat a/c) at zero value & not through a stock exchange. You may do this off-market transaction either on-line or through your broker.  Gift to brother's wife (relative) is exempt from capital gains u/s 56, so this transfer shall not have any tax implication for you, your bro & sis-in-law at this time. However, in event of sale of these shares, cost to you (previous owner) shall be cost to your sister-in-law u/s  49, hence details of your cost should be shared with her.  This shall apply to your bro also (original cost shall be cost to him at time of sale). So far as disclosure in ITR goes, only high net worth individuals with taxable income exceeding Rs. 50 Lakhs are required to give details of investments, otherwise no disclosure is needed for your sis-in-law ;but she will have to disclose cost of these shares as exempt gift received from relative. No need for you & bro to disclose this transaction.                                                                                     

This issue shall be settled by 'economic ownership' & not 'legal ownership' of these listed shares.(assuming that shares are listed.) I am assuming that as 2nd holder, you contributed to purchase cost in some ratio; if not (full cost was borne by your brother), you will not have any tax implication. Also, since you have not mentioned amount of consideration for the proposed shares transfer, this seems to be  a gifting arrangement.

Assuming that you paid for purchase cost in some ratio,  this shall be a gift from you to your sister-in-law, since your brother shall be common in both demat accounts. This shall be an 'off-market' transaction (from demat to demat a/c) at zero value & not through a stock exchange. You may do this off-market transaction either on-line or through your broker.  Gift to brother's wife (relative) is exempt from capital gains u/s 56, so this transfer shall not have any tax implication for you, your bro & sis-in-law at this time. However, in event of sale of these shares, cost to you (previous owner) shall be cost to your sister-in-law u/s  49, hence details of your cost should be shared with her.  This shall apply to your bro also (original cost shall be cost to him at time of sale). So far as disclosure in ITR goes, only high net worth individuals with taxable income exceeding Rs. 50 Lakhs are required to give details of investments, otherwise no disclosure is needed for your sis-in-law ;but she will have to disclose cost of these shares as exempt gift received from relative. No need for you & bro to disclose this transaction.