transfer of equity shares as a gift

[SrikanthReddyKolli CS]

dear learned members,

the brothers who are also directors of the public company want to
transfer equity shares between them for no consideration by way of
gift.

what will be the consequences if company registers the transfer deed
for no consideration

and also in taxation aspects

kindly quote the sections applicable both in companies act and income
tax act

thanking you
srikanthreddykolli
9618144661

[Suresh Kumar Vaishraj]

Dear Srikanth,

 

-A gift deed need to be entered.

 

-Check whether Gift tax is applicable, if applicable gift tax is payable in the hands of Donee i.e. transferee. (its applicable in case the value of gift is 50,000/- or more)

 

- The following gifts are exempted:

 

a. The gifts that one receives from relatives on the occasion of marriage, the gifts receives from parents and grand parents, the gift received by a daughter-in-law from her parents-in-law, and gifts received by way of a will and inheritance are exempt.

b. The gifts received by a son-in-law from his parent-in-law will be taxed.

c. Non-Resident Indian can gift to his/her parents in India from their NRE (Non-Resident External) account without their parents suffering any tax.

d. Gifts received at the time of marriage, by will.

 

Request others to give their views.

 

Thanks and Regards,

 
Suresh Kumar V
Company Secretary
91-9849991201


 

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[vickyp...@gmail.com]

Hi,
As per companies act, they can transfer the shares to each other and the gift deed should be affixed to the share tranfer deed..
From income tax point of view, i will answer u later....

Sent from my Nokia phone

[vikas kulkarni]

As per my opinion no income tax shall be levied.

 

Please go through section 56(2)(vi) read with proviso (a) which in short means - any sum of money exceeding Rs.50,000/- recieved without consideration, by an individual, in any previous year from any person (s) on or after 1/04/2006, the entire sum shall be taxable under the head 'Income from other sources' but provied- clause(a) says 'this clause i.e clause(iv) shall not apply to any sum of money recieved from any relative.

 

Regards,

VIKAS KULKARNI

[vikas kulkarni]

its clause( of section 56(2)(vi)...not (iv)

[SrikanthReddyKolli CS]

Thank You All for your valuble opinions

and one last thing i want to know is the instrument (supported by gift
deed) without or with nil consideration which attracts nil stamp duty
is acceptable in the eyes of law?

thanks all for replying
srikanth
9618144661

[vikas kulkarni]

The stamp duty is applicable in case of gifted shares as well.

The duty is at 0.25% of the market value prevailing on the date of execution of the transfer deed by the transferee.

 

Regards,

VIKAS KULKARNI

9618144661