Nri gift shares to resident relative

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 January 2018 Dear Sir,

My daughter has become NRI recently post her marriage as she migrated to USA for indefinite time on dependent visa. She has investments in Indian listed companies which was done by her through secondary market/IPO over a period of 8-10 years while she was Resident. The total value is approximately Rs. 40 lacs across 15-20 companies. The investment was made in Indian rupee.

Recently, she has converted her savings account to NRO-Savings account and re-designated her Demat account to NRO demat. She wants to gift these investment to me(Father) through Gift deed on Rs. 100 stamp paper.The transfer of shares would be through depository participant where both Father and Daughter is having account.

My queries are as under:
1. Is this Gift of shares without consideration to be reported under FEMA? If yes, what is the formalities?
2. Is this Gift attracts Tax under Income Tax? Is the Gift to be reported while filing Income Tax Report?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 January 2018 1 No need any reporting under FEMA.
2 Gift to relative will not attract any tax. Include the gift under exempt income in ITR.

Querist : Anonymous

Querist : Anonymous (Querist)

12 January 2018 Thanks a lot Sir.
Can you guide me on Gift of shares and securities exempt under which section of Income Tax and is there any cap on value of such gift? In my case, cost of such investment i.e. buying price is around 20 lacs and market value is around 28 lacs. This entire amount is exempt in the hands of gift receiver i.e. Father?

Is Gift deed is a must? And if yes, the same is to be Notorised?

Your valuable feedback would be highly appreciated.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 January 2018 See the link.
http://www.charteredclub.com/gift-tax/
No cap on value of gift.
Gift deed is not must.