A gift from a relative is exempt and thus it would be exempt for your brother. When your brother will sell the shares, capital gains would arise. If the monetary value of the gift is more than INR 50,000, it is taxable in the hands of the receiver as IFOS and taxed at slab rates.
If you gift equity shares to a relative, it is not considered as the transfer of a capital asset, and thus income tax is not applicable. When the receiver of the gift will sell the shares, capital gains would arise.
Do you have to pay tax on sale of gifted shares?
However, since the shares are funded by you, if your wife subsequently proposes to sell the gifted shares, clubbing provisions will have to be applied. Accordingly, the income arising from the sale of the gifted shares will be taxable in your hands.
What happens if you gift shares to your spouse?
In effect, the ‘cost’ to you, of the shares you gift over to your legal partner, then becomes his/her cost to set against the proceeds from a sale in the future. So, if these were ‘free’ shares and you never had to pay income tax through your pay (check that), as these cost you nothing, the cost you pass on will be nothing.
Do you have to pay capital gains on gift of shares?
Quite often, a shareholder (who may also be a founder) wishes to gift his or her shares to another shareholder (who may also be a co-founder), or to a family member of his. The good news is that there is no Capital Gains Tax on gifts of assets (including shares) you give to your spouse or civil partner.
Can a stock be gifted to a family member?
Stocks can be gifted to family members upon the client’s death. If they are held in a taxable brokerage account, this can be accomplished via the client’s will, a transfer on death designation in a brokerage account, via a beneficiary designation in a trust if the securities are held there, or via an inherited IRA, among other methods.
