Tax Implications of Gifting Stocks

What are the tax implications of gifting stocks?

Gifting stocks carries unique tax implications for both the person giving the gift (the Gifter) and the one receiving it (the Giftee).

For the Gifter:
  • Capital Gains: As outlined in the Income Tax Act, the transfer of a capital asset would typically be taxable under capital gains.
  • Exemption on Gifts: However, when shares or other securities are given as a gift, the gifter is exempt from any taxes on this transfer.
For the Giftee:
  • Upon Receipt of the Gift:
    • Gift Value Below ₹50,000: Gifts valued below ₹50,000 are exempt from taxes.
    • Gift Value Above ₹50,000: For gifts exceeding a value of ₹50,000, the giftee must pay tax under the heading Income From Other Sources (IFOS) at their applicable income tax slab rate.
  • Upon Selling the Gifted Stocks: Any capital gains or losses will apply when the giftee sells the gifted stocks.
  • Tax Exemptions:
Certain situations provide exemptions for the giftee as per the Income Tax guidelines:
  • Gifts from Relatives: Gifts from a relative (spouse, siblings of oneself/spouse, children, linear ascendants and descendants of oneself/spouse) are not taxable, regardless of the gift's value.
  • Gifts on the Occasion of Marriage: These are exempt from tax.
  • Inheritance: Gifts received as an inheritance are not taxed.
For a comprehensive understanding of tax implications, we suggest reviewing the income tax guidelines.

    • Related Articles

    • What are the tax implications on G-Secs?

      The tax implications on Government Securities (G-Secs) vary based on the type of G-Sec and the duration of the holding period. Short-term Capital Gains (STCG): If the G-Sec is sold within a short duration, the gains are classified as STCG and taxed ...

    • Are there any charges for gifting stocks on FYERS?

      There are no platform fees for using the stock gifting feature on FYERS — gifting is free of charge. However, a flat DP charge of ₹12.5 + 18% GST per stock (ISIN) is applicable for each gift transaction. This fee is treated as an off-market demat ...

    • What is the Tax P&L Report?

      The Tax Profit & Loss (P&L) Report is a comprehensive summary of the profits and losses you have incurred through various financial instruments such as stocks, Futures & Options (F&O), mutual funds, currency, and commodities over a financial year. ...

    • What are the timings for gifting shares on FYERS?

      You can initiate a gifting transaction anytime from 12:00 AM to 05:30 PM on a trading day. Here's what you need to know: If you start the gifting process within the aforementioned timeframe, the CDSL authorization will be sent between 6:00 PM to 7:30 ...

    • How does the Tax P&L Report help with income tax filing?

      The Tax P&L Report assists with income tax filing by providing: Accurate Reporting: Detailed breakdown of profits and losses, ensuring all relevant information is included in your tax return. Compliance: Helps comply with tax regulations by ...