As of 1 April 2019, shares may be gifted in Demat form, and the legal term is known as the ‘Transfer of Shares’. When you want to transfer shares, you are known as the ‘donor’ and the person who receives the gift is known as the ‘donee’. According to the Income Tax Act, gifts you give to a close relative are non-taxable. Nonetheless, if you want to give a gift of shares to a non-relative, what you gift, shares from a Demat account, will be taxable if the value exceeds Rs. 50,000 in a year.
When you hold a bank account, you may get a free demat account in case you need one. This is where shares are held, linked to a trading portal through which you can buy and sell shares. You may think of giving your relatives a gift. Shares are a good way to start youngsters on an investment journey. This is how you can transfer shares:
To End With
The transfer of shares from an online demat account is possible, but you may have to physically fill out delivery instruction slips and submit them. Also, once a gift of shares is executed, it can’t be cancelled. You can find out more at Motilal Oswal, giving you the best in financial services.
Related Articles: How to Open a Demat Account Without a Broker | Factors to Keep in Mind While Opening a Demat account | Factors to Consider When Opening a Demat Account | 10 Points to Remember When Operating your Demat Account | Types Of Demat Account & Trading Account
Share your Mobile Number with us and get started