CNBC Your Money: Transfer of shares and Tax treatment on the same

Dear Sir,


Can I sell equity shares of my brother in my trading account and if yes what is the tax treatment for these shares for me and my brother. Whether it will be long term capital gain or short term capital gain. Can I gift the shares to my spouse and what are the formalities for that?
Deepak

Answer:

Dear Deepak,
You are trying to do things in a very convoluted manner just to avoid opening a trading account. You will need to treat the transfer of shares to your brother as a gift and when he sells it in the market after paying the STT the capital gains will be exempt in his hands if the shares had been held by you for more than 12 months. He can then gift the sale proceeds to you. No tax anywhere in the transfer. It’s still a very convoluted manner just to avoid opening a trading account

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