Tax on inherited shares
This query is : Resolved
27 March 2025
I have received shares of my father after his demise as I was nominee in his demat account what will be the capital gain treatment of these shares
27 March 2025
No tax liability till you sell the shares.
27 March 2025
What will be the date and cost of acquisition when the shares are sold?
27 March 2025
As per COA as of his father and the date purchased b him, unless prior to 31 Jan 2018. In later case FMV as of 31 Jan 2018.
27 March 2025
If father had purchased shared on 1st January 2023 at a cost of 100 rs and then on death of father on 24 th April 2024 shared are passed on to nominee his son what will be the cost of purchase and date of purchase for son if he sells shared on 25 Sept 2024
27 March 2025
1st January 2023 at a cost of 100 Rs
28 March 2025
Since you have received shares as a nominee after your father's demise, this will be treated as an inheritance. According to the Income-tax Act, there is no capital gain tax liability at the time of inheritance. However, capital gains tax will arise only when you subsequently sell these inherited shares.
Capital Gain Treatment When You Sell:
Cost of Acquisition: The cost to you will be the cost at which your father originally acquired the shares (Section 49(1) of the Income-tax Act).
Period of Holding: Your holding period will include your father's holding period as well (Section 2(42A)). This is important to decide whether the gain is short-term or long-term.
If the total holding (your father's period + your holding) is more than 12 months for listed shares, it will be treated as long-term capital gains (LTCG).
If less, it will be short-term capital gains (STCG).
Tax Rate:
LTCG on listed shares exceeding ₹1 lakh is taxable at 10% without indexation.
STCG is taxed at 15%.
Capital Gain Treatment When You Sell:
Cost of Acquisition: The cost to you will be the cost at which your father originally acquired the shares (Section 49(1) of the Income-tax Act).
Period of Holding: Your holding period will include your father's holding period as well (Section 2(42A)). This is important to decide whether the gain is short-term or long-term.
If the total holding (your father's period + your holding) is more than 12 months for listed shares, it will be treated as long-term capital gains (LTCG).
If less, it will be short-term capital gains (STCG).
Tax Rate:
LTCG on listed shares exceeding ₹1 lakh is taxable at 10% without indexation.
STCG is taxed at 15%.
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