TaxTMI 
TaxTMI 
TaxTMI 
Gift - Shares and Securitites - from Father
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....ift - Shares and Securitites - from Father<br> Query (Issue) Started By: - Jignesh Shah Dated:- 22-9-2011 Last Reply Date:- 27-9-2011 Income Tax<br>Got 5 Replies<br>Income Tax<br>Dear Expert, My client has a typical problem. She is working with a Financial Services company. She started investing in stock markets from year2001 onwards. She had her D-mat account in her maiden name with her husband b....
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....eing the joint holder. She invested / traded in the same account till 2006. Then she had some disputes with her husband for some reasons and fearing the worst she transferred the shares in her D-MAT account to her father's account in his single name. This transaction took place in 2008. She closed her D-MAT account. The dividend for the same was credited to a bank account jointly held by her fathe....
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....r and her. Now the disputes with her husband are settled. She wants to transfer the shares back from her father's account to her new D-MAT account. Can she take Gift from her father of the shares which she had tranferredr? There has been no transaction in her father's D-MAT account sinc the shares were transferred. Also, her father has not shown the dividend income in his return. The portfolio is ....
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....worth a significant amount. What is the best way to take the custody of the shares in her account legally? Reply By KRISHNAN SURYANARAYANAN: The Reply: Who was paying tax after transfer to father's account? If father has not been paying tax but only daughter then there was no real transfer in the income-tax sense. Even father had been paying tax shares can be transferred now and will not be hit ....
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....by the restrictions of section 56(2) as daughter has been included as a relative in the explanation to section 56(2).This set of transactions will not be treated as cross transactions as what is given to father is taken by daughter and shares being movable properties can be transferred through physical handing over of documents and does not require registration at the registration department. Re....
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....ply By Jignesh Shah: The Reply: After the shares were transfered to father's account, there were no transactions except the dividend received and hence there was no tax liability as such. Father had not declared the dividend income in his returns either. Now if the shares are taken back by the daughter by executiing a gift-deed on Rs. 100 stamp paper, can there be any legal complications? Can it ....
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....be done any time now? Reply By KRISHNAN SURYANARAYANAN: The Reply: No problem is envisaged and the method suggested in the question can be adopted. Reply By Jignesh Shah: The Reply: Dear Mr. Krishnan, does the client need to show the same in her IT Returns for the year as the same is anyway exempt? What is a proper practice? Please let me know. Reply By KRISHNAN SURYANARAYANAN: The Reply: In....
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.... my considered opinion there is no need to show it in the return as the receipt is not income at all.<br> Discussion Forum - Knowledge Sharing ....