From an Indian income tax perspective, gifting of any sum of money or any property (including shares) to your son would not trigger a taxable event, either in yours or your son’s hands. Stamp duty implications, if any, on the transfer of shares to your son should, however, be evaluated.
Is indexation benefit available on unlisted shares?
But unlisted securities are taxed differently. The profits from stocks sold after holding them for over 24 months are taxed as long-term capital gains. Such gains are taxed at 20% after indexation. However, when it comes to unlisted securities, there’s a concept called fair market value (FMV).
Can I sell unlisted shares after listing?
After 01.04. 2019, SEBI has mandated that no physical shares can be sold. If somebody wants to sell its shares, then first, it must be converted into Demat form. So in the unlisted market, shares are always credited in Demat form only.
Can STT be paid on unlisted shares?
STT i.e. Securities Transaction Tax is the tax on the purchase and sale of securities listed on a recognised stock exchange in India. Thus, STT is not paid on Unlisted Shares. However, when a company offers shares to the public under IPO i.e. Initial Public Offering, such shares are later listed on the stock exchange.
What happens with shares when someone dies?
When a shareholder dies the right to his interest in the shares will pass to whoever inherits them under his will or intestacy. The deceased shareholder’s rights will be administered by his or her executors (if there is a will) or administrators of the estate if the shareholder has died intestate.
What does it mean to transfer shares of unlisted company?
On receipt of the said Notice, the Company in turn, notifies about the offer to the other members along with the price at which such shares would be available to them for purchase. More often, this right of members is eventually called as a “Right of Pre – Emption”. 3. Determination of the price at which the transfer shall be held.
What happens if I dispose of my father’s shares?
If you dispose of the assets within 1 year of acquisition then 100% of the gain is added to your assessable income, thereby losing the 50% discount. The shares that your father inherited or acquired prior to 20 September 1985 are exempt from CGT on being transferred into your name.
Is there a proviso for transfer of unlisted shares?
Recently, a proviso has also been proposed to be incorporated in the Finance Bill, 2016 (as passed by Lok Sabha on May 05, 2016) to amend clause (42A) of Section 2 of the Income Tax Act, 1961.
Do you have to pay tax on shares inherited from father?
So assuming that you sold listed shares inherited from your father the LTCG on such shares will be exempt from tax. When you gift shares to the relatives named above there is no tax in either hand. As and when the recipients of the gifted shares sell the shares in the market they will be eligible to tax.
