According to Upstox News Desk, there is a provision of gifting to relatives that is tax-free as per Section 47 of the 1961 Act that has been incorporated in the Income Tax Bill 2025. This Section 47 retains major provisions concerning transactions that are not deemed as transfers for capital gains tax implications. Section 47(iii) of the Income Tax Act 2025 specifically exempts transfers by way of gift from capital gains tax in the hands of the giver, but the recipient inherits the original purchase price, not the market value on the date of transfer. As reported by Upstox, when the recipient eventually sells, capital gains are calculated from what the original owner paid. According to Economic Times Wealth, these provisions apply to transfers to a spouse or minor child, while gifts to other relatives such as parents or major children are generally not covered, and income from such investments is taxed in the recipient's hands.
For online transfer, investors can register with either CDSL Easiest or NSDL Speed-e platforms. According to Upstox, for registering on the Easiest platform, you will need the DP ID and Client ID. The Speed-e interface enables demat account holders to submit instructions directly on the Internet through the SPEED-e website without using paper. As a second step, you can add your wife's demat account as the beneficiary by clicking on the 'transaction' tab, selecting the setup, and filling in the ISIN of the stock to execute the transfer. Execution can be completed by entering the transaction PIN and authorising the transaction by entering the PIN.
For offline transfer through Delivery Instruction Slip (DIS), investors need to obtain a DIS from their broker. As reported by Upstox, for the transfer, you need to mention the target or beneficiary account holder name, including the BO ID and ISIN details. The last step involves depositing the DIS slip with your broker. Some brokers also offer a facility wherein you can transfer shares simply as a gift, and upon your authorisation to your depository, the broker will set an off-market transfer of shares. According to Economic Times Wealth, for a transfer from the mother's demat account to the wife's demat account, please complete an off-market transfer using Delivery Instruction Slips (DIS) from the relevant demat account your wife holds.
According to Upstox, while the transfer from one spouse is tax-free in the hands of the transferor, the taxability in the hands of the transferee cannot be ignored. In cases when there is a considerable rise in the share price from the original price, the tax liability can be substantial. The article emphasizes that this is an important consideration when planning such transfers, as the recipient will inherit the original purchase price basis for future capital gains calculations. According to Economic Times Wealth, these provisions apply to transfers to a spouse or minor child, and the tax authorities may use bank trails and documents to verify the source of funds and apply clubbing rules. These provisions also apply to transfers of salary bonuses, where the tax liability depends on whether the recipient invests the funds in tax-exempt instruments or taxable investments.
