The father/mother are very old and now wants to transfer his/her stocks/shares (original cost Rs. 45000 Current market value Rs.70 lacs approx.) to one of his/her daughter (there are two daughters only). What would be the tax & stamp duty implications and on what value. Please note that since its a gift therefore there is no consideration involved in the transfer of the stocks/shares. Also, what disclosure is required at the time of filing annual return in the Income tax form by the daughter. Pls advise.
PS: Is there any tax implication on the donor father/mother who is retired and Super Senior Citizen.
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TAX IMPLICATION ON GIFT TAX
Replies (2)
Quick Summary
Inheritance there is no tax
Parents gifting shares to children:
• A gift of shares from parents to children (relatives) is exempt for the children (Sec 56(2)(x)) and isn't a transfer for the parents (Sec 47(iii)), so no capital gains for them.
• The children's cost = the parents' cost (Rs 45,000), and the holding period includes the parents'. For listed shares bought before 31 January 2018, the grandfathered FMV applies.
• When the children sell, they pay LTCG (12.5% above Rs 1.25 lakh per year under 112A).
• Clubbing: none for adult children. For minors, clubbed with the parent.
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