@Cyclodium Ji,
When you will transfer shares to your relatives as gift then it won't be taxable in their hands as gift income but when they will sell those shares then they will have to pay tax under Capital Gain head.
Purchase price for the receiver of gifted share will be purchase price of the person who is gifting.
Period of holding for long/short term capital gain will be counted cumulative of sender period of holding plus receiver period of holding together.
If that period of holding exceeds 1 year then the receiver has to pay 10% capital gain tax on the value exceeding Rs 1,00,000. For example if capital gain is Rs 1,50,000 then they will have to pay C.G @10% on RS 50,000(1,50,000-1,00,000) i.e Rs 5,000.
@sdshah Ji
Buying price of the receiver:
1. In case of Relative: For receiver relative buying price would be Rs 100 i.e sender buying price.
2. In other case: Receiver buying price will be considered Rs 120. They will pay tax in head of other source(gift income) on difference of 120-100 and then they will pay tax in head of capital gain on difference of selling price - 120 if total value of shares gifted exceed Rs 50,000 in a year.
Note: For receiver this Rs 50,000 is for all the gifts received from all the people in a year.
In case of gift to relative, the benefits are:
1. No other source/gift income tax
2. Purchase price & period of holding will be considered from sender.
Zerodha (Trading Account)
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