Gifting shares is becoming increasingly popular in India. Instead of gifting cash or jewellery, many investors prefer gifting stocks to help their loved ones build long-term wealth. But how exactly do you transfer shares to someone else? What charges apply? Is it taxable? Who is considered a “relative” for tax-free gifting?
This guide explains everything — in a simple, step-by-step format.
1. Two Ways to Gift Shares
In India, you can transfer shares to someone through:
A. Offline Mode (Physical DIS Slip)
You fill a Delivery Instruction Slip (DIS) from your depository participant (DP) and manually submit it.
B. Online Mode (Through Broker Portal / App)
Brokers like Zerodha, Upstox, Angel One, ICICI Direct etc. allow online gifting of shares through their console or app.
Both are legal and recognized under the Depositories Act.
2. Offline Transfer (Physical Method)
This is the traditional method.
Step-by-Step:
- Take a DIS slip from your DP (NSDL or CDSL participant).
- Fill in the receiver’s DP ID, Client ID, Name, ISIN, and number of shares.
- Sign and submit the DIS to your DP.
- The DP processes the transfer within 24–48 hours.
- The receiver gets the shares into their demat account.
Important:
Make sure the names match exactly; otherwise the DP will reject the transfer.
3. Online Transfer (Gifting Shares Through Broker)
Most modern brokers offer a simple online gifting system.
Below is the common flow (e.g., Zerodha Console):
Step 1: Log in to your Broker Console/App
Go to the section where share transfers are allowed.
Step 2: Click on “Gifts” or “Transfer Shares”
Every broker has a dedicated “Gift Stocks” option.
Step 3: Enter the Receiver’s Details
- Name
- Phone number
- Email ID
The receiver will get a notification.
Step 4: Select the Shares You Want to Gift
Choose the stocks and quantities.
Step 5: Receiver Accepts the Gift
The receiver gets an SMS/email and must log in and accept the gift.
Step 6: Shares Move to Receiver’s Demat
Once accepted, shares are debited from your demat account and credited to theirs.
This process is entirely electronic and usually completes within 24 hours.
4. Charges for Gifting/Transferring Shares
CDSL/NSDL charge a Market Transfer Fee:
₹5 to ₹25 per ISIN (approx.)
Some brokers add:
- DP charges: ₹13–₹20
- GST: 18%
Example:
If you transfer shares worth ₹30,000, DP may charge:
- Market transfer fee: ₹25
- DP fee: ₹13
- GST: ~₹6
Total: ₹44 (approx.)
Charges vary slightly by broker.
5. Tax Implications of Gifting Shares
A. Tax for the Giver
No tax.
Gifting is not taxable for the giver.
B. Tax for the Receiver
Depends on whether the giver is a relative or non-relative under the Income Tax Act Section 56.
6. Who Is Considered a “Relative”? (As per Income Tax Act)
Gifts from relatives are fully tax-free, regardless of value.
The following are treated as relatives:
Blood Relations
- Father
- Mother
- Son
- Daughter
- Brother
- Sister
Spouse Relations
- Husband
- Wife
Extended Relations
- Father’s brother / Father’s sister
- Mother’s brother / Mother’s sister
- Spouse’s siblings
- Son’s wife
- Daughter’s husband
- Grandparents
- Grandchildren
All gifts to/from these people are tax-free.
If the Receiver is NOT a Relative
Gifts above ₹50,000 (FMV) become taxable as income in the receiver’s hands.
7. Tax at the Time of Selling Gifted Shares
When the receiver sells the gifted shares:
- Cost of acquisition = original cost paid by giver
- Holding period = counted from the giver’s purchase date
This affects LTCG/STCG calculation.
8. Summary
| Topic | Key Point |
|---|---|
| Can you gift shares? | Yes, via offline DIS or online broker system |
| Is gifting taxed? | No, giver pays no tax |
| Receiver tax? | Tax-free if giver is a “relative” |
| Charges? | ~₹5–₹25 per ISIN + DP charges |
| Offline mode? | Use DIS slip |
| Online mode? | Use broker’s “Gift Shares” option |
| Selling tax rules? | Original cost & holding period apply |
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