I having benifit on share Rs 50000, if I transfer theser shares to my wife. should I pay any gift tax. if my wife sold these shares from her account then what will be tax liablity if her annual income is less than 3 lac rs. including profit in shares.

Ans: Gift received from relative (spouse included in its meaning) is not considered as income from other sources and will not be liable to tax. Further, income earned by spouse from the amount invested will be clubbed in the hands of wife (gift giver).

Thus, dividend income and capital gain on transfer of shares will be clubbed in the hands of wife.

Ans: Profit earned on Sale of Shares transferred by you to your spouse, shall be clubbed with your income & taxed accordingly.
Tax rate shall be applicable on the date of sale of shares, at a special rate of tax for LTCG on Securities.

Ans: Tax Implications on Transfer of Shares to Your Wife
No tax on the transfer:
Transferring shares to your wife is treated as a gift.
Under Indian tax laws, gifts between spouses are tax-free.
There is no gift tax for you or your wife on this transfer.

No capital gains tax at the time of transfer:
Since you are not selling the shares, there is no capital gain.
Hence, no capital gains tax applies to you.

Tax Implications When Your Wife Sells the Shares
Clubbing of Income Rules Apply:
Even though the shares are in your wife’s name, the capital gains will be taxed in your hands.
This is due to the clubbing provisions under Section 64 of the Income Tax Act.
The income from the gifted asset is added to the income of the person who gifted it.

Capital Gains Calculation:
The original cost of acquisition and the holding period will be based on when you bought the shares.
This means:

Short-term or long-term capital gain will depend on your holding period.
Indexed cost (for long-term gains) will be based on your purchase date.
Tax Rate:

Short-term capital gains (STCG): Taxed at 15% if held for less than 1 year.
Long-term capital gains (LTCG): Gains above Rs 1 lakh taxed at 10% (without indexation) if held for more than 1 year.
Key Points to Remember
The capital gain will be added to your taxable income, not your wife’s.
If your wife reinvests the proceeds, income from that reinvestment will be taxed in her name.
This clubbing rule applies only to the first level of income (capital gains in this case).
How to Reduce Tax Liability (Legally)
If your wife invests the sale proceeds into new assets, the future income from those assets will be taxed in her name.
This helps in tax planning for future earnings.
Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

www.holisticinvestment.in
https://www.youtube.com/@HolisticInvestment

Ans: This is a case of Gift of Shares to Spouse, without Consideration & without an agreement to live apart.
In this case any Income/Capital Gain from sale of such shares, shall be clubbed together with the income of the transferor.
To me, your second option on opinion taken earlier seems more relevant & logical (as mentioned in your question).
Most Welcome for any further clarifications. Thanks.

Ans: With reference to transfer of shares to spouse, if the same is transferred as gift - said transfer is not subject to tax. However, future income will be clubbed in the hands of husband.

In case of short term gain, STT is not deductible. However, all expenses wholly and exclusively incurred in relation to the sale/ transfer of shares are allowed to be deducted like Brokerage, GST.

In case of Intra day, all expenses are allowed as deduction from business income which are related to transfer of shares.