Capital gain on transfer of shares

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 December 2014 My Principal has a client trading in stock market. He transferred some shares of a company to his wife's demat a/c offmarket. The shares were held for more than one year by the client in his demat a/c. now the shares have been sold through his wife's a/c. Kindly guide me the accurate treatment of capital gain in the books of both the client.

Amol S Joglekar

Amol S Joglekar (Expert)
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02 December 2014 The shares were transferred without consideration?
If yes...then the capital gain, if any arising out of selling the shares through wife's account shall be deemed to be the gain of husband.

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CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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02 December 2014 NO capital gain will arise under section 10(38) if STT has been paid. and if No capital gain then clubbing provisions become irrelevant.

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Amol S Joglekar

Amol S Joglekar (Expert)
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03 December 2014 Can we assume "payment of STT" for OFFMARKET trade?

CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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03 December 2014 No you cannot assume for liability for payment of STT in case off market transaction.

STT is levied at the rate of 0.2% of transaction value of security done on recognised stock exchange

Amol S Joglekar

Amol S Joglekar (Expert)
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03 December 2014 Thank you.
The querist has stated that the trade was OFFMARKET...
Please refer line 2 of the query.

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2014 Thanks a lot for the answer...

Querist : Anonymous

Querist : Anonymous (Querist)

03 December 2014 Thanks a lot for the answer...
but what will be the treatment of sale of share took place in wife's a/c?
the share was trfd without any consideration.

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CA Kumar Mukesh

CA Kumar Mukesh (Expert)
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03 December 2014 As I already mentioned that if it comes within the meaning of 10(38), then clubbing provision becomes irrelevant i.e. No impact on the Income of husband even after applying clubbing provisions

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