My mother has held physical shares in a few listed companies for many years now. Can she gift them to me? I don’t want her to open a demat account at this stage to convert her holdings from physical to demat form. Also, what are the tax implications, if any?
- Radhika Nanda
Your mother can transfer the shares. They can either be gifted to you or transferred in your name. Neither of these transactions will attract any capital gains tax.
The normal procedure for transferring shares is as follows. First, you will have to obtain the share transfer forms. These are available with brokers and the registrar. The filled-up share transfer forms along with the original shares need to be sent to the registrar of companies. The latter will in due course send back the transferred shares to you in physical form. You can then get them converted into demat form.
As for the tax implications, there are none for the above procedures. However, if you wish to sell these shares, you will need to hold on to them for at least one year to be able to avail of the tax exemption offered on long-term capital gains.