Tax im­pli­ca­tions

Consumer Voice - - Demat Account -

Se­cu­ri­ties re­ceived as in­her­i­tance are ex­empt from tax. Also, if you move your shares from one ac­count to another, there is no tax im­pli­ca­tion. The trans­fer of shares to ac­counts of spec­i­fied rel­a­tives (spouse, par­ents, sib­lings, chil­dren and other lin­eal rel­a­tives) are also tax-ex­empt. Any as­set trans­ferred to a non­rel­a­tive is treated as a gift and is taxed along with the re­cip­i­ent's in­come if the value ex­ceeds Rs 50,000 in a year. There are tax im­pli­ca­tions even if it is not a gift. If the trans­fer in­volves pay­ment by the re­ceiver, it is treated as a pri­vate deal and any cap­i­tal gain ac­cru­ing to the owner is taxed as in­come at the nor­mal rate. This is be­cause off-mar­ket trans­ac­tions are not routed through an ex­change and, hence, do not at­tract a se­cu­ri­ties trans­ac­tion tax (STT).

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