Tax implications on transfer of trading account

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Engineer
123 Points Posted on 19 July 2022

I had a trading account with Karvy. A few years back Karvy was shutdown due to violations and they transferred the account to IIFL. 

This account with Karvy was held jointly with my wife (wife - 1st applicant and myself as the second applicant).

I already have a trading account with IIFL (soley owned by me but my wife is a nominee).

I would like to transfer the securities from the IIFL account (jointly owned) to my other IIFL account (solely owned by me).

Would there be any tax implications if I transfer the securities?

If so, are there any other options?

Thank you!

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On 19 July 2022 at 06:10 Report
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Quick Summary
This discussion explores the tax implications of transferring securities from a joint trading account (held with a spouse) to an individual's sole account. The key concern is whether this transfer constitutes a sale and incurs capital gains tax. While Stamp Duty Transaction Tax (STT) may apply, it's generally considered a small amount. The consensus is that if it's not a sale, the original purchase date should be used for capital gains calculation, with the cost basis adjusted to 31st January 2018, and no immediate capital gains tax is expected if the shares are held for over a year post-transfer.

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SEO Sai Gr. Hosp.
212535 Points Posted on 19 July 2022

As such it may not be sell transaction, but you need to pay STT while transfer, and as such there will be reporting of the transfer of shares of particular value.

Now, you will be required to reply to ITD about its transfer between same PAN, in case of inquiry.

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On 19 July 2022 at 16:14
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Engineer
123 Points Posted on 19 July 2022

Thanks for the response.

It's not transfer between same PAN, it would be from my wife's PAN (jointly owned with my PAN)  to my PAN. 
Who has to pay STT, me or my wife? 
Other than this, do I or my wife have to pay any taxes. I am not planning to sell the shares (after the transfer) at least for a year or so. Would the cost basis be the market price on the date of the transfer?
 

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On 19 July 2022 at 18:59
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SEO Sai Gr. Hosp.
212535 Points Posted on 19 July 2022

1. Do you have any evidence about her contribution in investment?

2. Yes, date of transfer if sale transfer; otherwise original purchase date.

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On 19 July 2022 at 19:22
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Engineer
123 Points Posted on 19 July 2022

1. These were purchased some 20 years ago by me as joint (my wife - 1st applicant, me - 2nd applicant).
It doesn't matter who pays STT as the amount should be very small.

2. It's not a sale transfer, So, I guess its original purchase date. But for capital gains calculation, the cost basis is 31st Jan 2018.

 

So, other than STT there's no taxes to be paid. Right?

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On 19 July 2022 at 19:49

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