share trf

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 March 2010 if father dont have trading a/c he wants to transfer his demat a/c shares purchased in primary market 3 year back to son demant a/c to sell what effect in both it & if he gift what precaution needed

Aditya Maheshwari

Aditya Maheshwari (Expert)
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11 March 2010 If shares are gifted then no tax implication to the father and if the son sells immediately after transfer into his account then it will be LTCG exempt u/s 10(38). Do prepare a declaration of gift at the time of transfer. It can be on a plain paper but if it is on a Rs. 100/- stamp paper it is preferable.

If shares are sold then father will pay LTCG tax on the transfer and the consideration will the closing market price at the time of transfer of share and when the son will sell he will pay STCG tax on sale if sold within one year.