Archive · 27 Dec 2025
Tax Implications on Property Gifts and Share Transfers
If you give a property to your son as a gift, he won't have to pay tax on receiving it.
However, any money he makes from that property or if he sells it later, he will have to pay tax on those earnings.
The cost of the property for tax purposes will be what you originally paid for it.
If you transfer shares from your personal account to your company, you might have to pay capital gains tax.
The company might also have to pay tax if the shares are worth more than what you paid for them.
If you sell equity mutual funds you bought more than a year ago, you'll pay a 12.5% tax on the profits, but only if those profits are more than Rs 1,25,000.
Property received as a gift from a parent is not taxable for the recipient.
Income from gifted property or capital gains on its sale are taxable in the recipient's hands.
Transferring shares to a private limited company may incur capital gains tax for the individual.
The company may have to pay tax on the differential amount if shares are transferred below fair market value.
Long-term capital gains on equity mutual funds sold after 12 months are taxed at 12.5% on gains exceeding Rs 1,25,000.
- Who
- Individuals transferring property or shares, and recipients
- What
- Tax implications on property gifts and share transfers
- When
- At the time of transfer or sale
- Where
- India
- Why
- To understand tax liabilities and exemptions
- Property Gift Tax
- No tax on property received by son from father as gift
- Relative Definition
- Son is considered a relative under the Act
- Income from Gifted Property
- Taxable in the hands of the son
- Cost of Acquisition
- Deemed to be the cost incurred by the parent
- Share Transfer Tax
- Capital gains tax may apply on transfer of shares
- Fair Market Value
- Differential amount may be taxable as income
- Equity Mutual Funds
- Long-term capital gains taxable at 12.5% on gains exceeding Rs 1,25,000
- Holding Period
- Units held for more than 12 months are classified as long-term capital assets