Gift stocks tax implications for senders

Hey, I purchased 10 shares of ‘X’ on the common value of 100. Then, I gifted this to my sister when the value of the inventory was 150. Now the inventory is round 200.

In my P&L Tax, 500 which is (150-100)*10 is proven as revenue which will probably be taxed. However shouldn’t all of the tax over the acquire be taxed at my sis finish and never from me?

@Quicko Are you able to assist us with this question?

This additionally occurred to me. After I gifted shares to my mother, they have been all in revenue. Nevertheless, once I transferred these shares to my Mother’s account, the P&L assertion in my Zerodha account was displaying as a revenue however actually I by no means realized any earnings.

I personally marked all of the shares which I gifted after which discusses with CA(with quicko) and didn’t pay any taxes on the gifted shares. Nevertheless you’ll want to modify the acquisition worth on the giftee facet. It is because whenever you reward them, the acquisition value for the giftee would be the present value of the inventory on the day you gifted.

Hello @krritik

As per the Earnings Tax provisions for gifting of shares, the revenue/features from the sale of shares are taxable within the fingers of the receiver.

Therefore, your understanding is appropriate, it ought to be taxable within the fingers of your sister when she sells these shares, she obtained as a present from you. For the aim of calculating LTCG/STCG, it is very important take into account the interval of holding and the value of shares to the earlier proprietor.

In case the dealer assertion nonetheless reveals the earnings in your Tax P&L because the dealer just isn’t intimated for the reward of shares or some other purpose, you possibly can ignore the identical on the time of submitting of return.

So, how did you separate out the shares which you gifted and the remainder for which it’s important to pay tax whereas submitting the ITR? For the reason that doc from Zerodha comprises all of the shares and no distinction.

Additionally, how did you replace the acquisition value on the giftee facet?Thanks prematurely.

In that case, paperwork by the Zerodha gained’t be legitimate. What different paperwork can I present that these are the gifted shares? Additionally, how will I distinguish these from remainder of the shares?

So, how did you separate out the shares which you gifted and the remainder for which it’s important to pay tax whereas submitting the ITR? For the reason that doc from Zerodha comprises all of the shares and no distinction.

I do know which shares I gifted. So I marked them manually. There is no such thing as a particular distinction between Offered shares and gited shares. All gifted shares will probably be proven as bought.

Additionally, how did you replace the acquisition value on the giftee facet?

It is advisable to elevate a request with the Zerodha crew to do that. It’s important to inform them that you just need to replace the acquisition value of the shares which can be obtained as reward. However that is fairly laborious as a result of then you’ll want to enter all of the “Purchase” transaction from the gift-er. I believe when you’ve gotten your P&L after which you possibly can present this as proof to your sister after which focus on with CA to compute the features sooner or later.

If want be Govt. can cross confirm this as they’ve entry to the Demat statements. You additionally see these transactions in your AIS statements.

Hello @krritik

Right here’s How one can reward securities? on Zerodha.

At Zerodha, for monitoring and reporting functions, the inventory’s closing value on the day the inventory will get transferred is the exit value for the particular person gifting the inventory, and the identical value is used as an entry value for the particular person receiving the reward. The typical value is up to date inside 3 working days after the shares are transferred. Whereas submitting for earnings tax, a distinct view could be taken on the acquisition value.

Having a present deed will help the sender and receiver as it might function proof of the reward transaction. In circumstances of scrutiny, you should use this doc to justify the genuineness of the reward transaction.

So, for the giftee (your sister), when she sells these shares, she ought to take the acquisition value because it was to you whereas submitting her ITR. While you file your ITR, you possibly can ignore these transactions that have been gifted, in case it’s incorrectly mirrored in your Zerodha report.As rightly talked about by @Z-Consumer it is possible for you to to see the transactions in your AIS.

Hope this helps.

Nevertheless you’ll want to modify the acquisition worth on the giftee facet. It is because whenever you reward them, the acquisition value for the giftee would be the present value of the inventory on the day you gifted.

My understanding of that is completely different from what’s acknowledged above. From the article posted, it says “ * Buy Worth – The worth of the acquisition of the earlier proprietor i.e. sender of the reward”.

This interpretation is sensible to me. Let’s take an instance:

Gifter:Purchased XYZ inventory at 100Gifted inventory to giftee, with present worth at 200

Giftee:Per quote above:buy value is 200If bought at 201, then tax is simply paid for (201-200)=1The govt loses tax on the appreciation from 100 to 200. Which they gained’t do.

Per the article:Buy value is 100If bought at 201, tax applies to (201-100)=101.Govt is joyful.

CA’s and tax specialists might appropriate my understanding, if incorrect.

Per the article:Buy value is 100If bought at 201, tax applies to (201-100)=101.Govt is joyful.

This interpretation is appropriate.

Thanks lots for the assistance! I understood it.

Okay, I missed how that is calculated in Zerodha. Thanks for the assistance. I’ll do the identical whereas submitting the ITR.

Presents receeived on 2nd hindu marriageAre tax free ?

Presents obtained on 2nd muslim marriageAre tax free ?

Hey @HSL,

Presents obtained on any marriage in India are tax-free.

@Quicko how does it matter to the senders of the reward? do they should file the switch of their ITR whereas there isn’t a earnings from these shares.

Hey !

I’ve achieved all steps for gifting shares

However 6-8 pm e mail got here late at 8:16 pm

And I authorised with OTP at 9:55 pm

Is it gonna undergo ?

Or gonna fail ?