Tax liability on sale of gifted shares

Budding Star


I have a query regarding gifting shares. I have gone through few posts here & Quicko article on this but I have not received a clear picture.

A mother & her son (major) are both separate Zerodha account holders. Mother owns shares in her demat account that she held for more than 10 years. She wants to gift all those shares to her adult son. I have researched that such a transfer will not attract any income tax liability to either of them except for a nominal off-market transfer fee. My query is as follows.

Lets say the son sells the shares within a year of the gift transfer, say, in 6 months.

  1. The capital gain would be LTCG since the original purchase date would be considered. Is this correct?
  2. The LTCG will be taxable in the hands of the son & Clubbing Provisions of IT Sec 64 (or 60 or 61) would NOT come into play. Is this correct?

Thank you very much.!

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Benevolent Benevolent
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I had the same question and found this:


So to summarize, son has to show 2 things in his ITR:

  1. Capital Gain: This will be calculated based on the original purchase date by the mother and the sell date by the son. (on the financial year he sold the shares)
  2. Exempt Income: In the same financial year in which he received the shares from the mother.
    1. What should be the exempt income amount to be shown in Son's ITR, is also not clear to me i.e. whether the actual share buy price or gifted date share price, because in AIS it shows gifted share price. Let me know if you find an answer to this. Some CA can help here.

Benevolent Benevolent
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confirmed from a fresher CA, he mentioned the original purchase amount needs to be shown in exempted income. 
Need some veteran advice for confirmation.
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