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Transfer of shares from individual to huf

caoffice caoffice (33 Points)

01 November 2021

whether transfer of shares demat to demat from individual to huf will amount to transfer as per income tax act 1961?.

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10 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 01 November 2021

No....

CA Aakarsh Jain (CA) (10216 Points)
Replied 01 November 2021

No it is not regarded as transfer because when you transfer shares to huf then it is treated as a gift and gift to relatives is not amount to transfer as per income tax act 1961.

If you found my answer helpful then please like my reply so that I'll be motivated to answer more. Thank you for your query. 😇

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caoffice caoffice (33 Points)
Replied 01 November 2021

As far as i read it it will attract section 64(2) of income tax act 1961. Want to confirm the same.

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 01 November 2021

No....

CA Aakarsh Jain (CA) (10216 Points)
Replied 01 November 2021

Refer my answer caoffice

CA Raj Doshi (Practising CA) (8723 Points)
Replied 02 November 2021

For a HUF( donee - receiver ), the member of the HUF being an Individual ( donor - giver ) is a relative for the purposes of Sec 56(2). So the gift is a taxfree transfer.

However, on a reading of Sec 64(2), it seems that income generated from the shares transferred would be clubbed In the hands of the individual.

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CA Aakarsh Jain (CA) (10216 Points)
Replied 03 November 2021

Agreed with raj c doshi

ABHISHEK (Student) (412 Points)
Replied 03 November 2021

Whenever we transfer the share through share transfer slip, it is mandatory to mention the reason of transfer without which it can not be transfered.
Reason could be gift, sale( in case of sale- selling price needs to be filled- preferred FMV should be filled). One can also share the payment mode details like neft no, cheque no.

These data must be shared with IT deptt by SEBI.

Now come to your question, demat transfer can be treated as transfer if u perform transaction just like transaction with outsider and share all the details on share transfer slip.