Stocks, Mutual Funds Gift: Taxable or Not? Experts Explain

Gifting equity shares and mutual funds is a growing trend in India for wealth transfer. Tax implications vary based on the relationship between the giver and receiver, with exemptions for immediate relatives. Proper documentation is essential to avoid tax liabilities, and recent SEBI regulations have simplified the gifting process for mutual funds. Kumarmanglam Vijay, Partner and Head of Practice – Direct Tax, JSA Advocates & Solicitors told Times Now that the gifting of equity shares and mutual fund units involves three distinct tax moments, at the donor’s end, a genuine gift triggers no tax. “At the recipient’s end, the law exempts gifts from relatives (as defined), on occasion of marriage, under a will or by inheritance, from specified institutions or other specified categories. Outside these categories, if the aggregate fair market value of such assets received in a year exceeds Rs 50,000, the entire fair market value becomes taxable. When the recipient eventually sells, capital gains tax shall apply.”  Read more