Capital Gain

[Siddharth Singh]

A NRI is holding shares in Indian (Private) Company for more than 12 months. Now he wants to transfer 50% of his holding to his NRI wife. The same could be for consideration or by way of gift. My query is whether the NRI required to pay any tax in India if he gets any capital gain from the above if he (i) trasnfers it for consideration or (ii) transfer as gift .

Also will he be required to file his tax return in India.

Thanks

[Rama Krishana]

As per the provisions of Section 56 of the Income Tax, a Gift from husband to wife or wife to husband is not taxable.

AI Summary

NRI Shareholder Transfers 50% Shares to Spouse: No Tax Implications Under Section 56 of Income Tax Act An NRI holding shares in an Indian private company for over 12 months wishes to transfer 50% of his shares to his NRI wife, either for consideration or as a gift. The query concerns the tax implications and filing requirements in India for such a transfer. The response clarifies that under Section 56 of the Income Tax Act, gifts exchanged between spouses are not taxable.