My daughter had gifted me 4,000 shares Of Titan Industries in June 2020 from her Demat a/c to that of mine (off-market transfer). I am 77 years old now and due to my old age I want to regift the same to her as a gift settlement. Is it ok as per IT laws? If it is not proper, can I gift these shares to my granddaughter who is 21 years old and has a Demat a/c?

a.  Kindly explain the tax implications at the hands of the receiver.

b.  There are two reason codes to select while gifting (a) 89 – transfer between specified family members and (b) 92 – Gift. Which option is appropriate to select?

Muthusami K

Section 56(2)(x) of the Income-tax Act specifically excludes from the purview of taxation transactions between relatives. Relative is defined to include any lineal ascendant or descendant. Hence, you could gift the shares to your daughter or your granddaughter. This transfer would have no income-tax implications for you or for your daughter / granddaughter. It is not clear if you are referring to the code in the tax return form. In this case, you could choose 89, as this relates to a transfer to relative. 

The writer is Partner, Deloitte India  

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