Can I buy shares with funds transferred from my NRI sibling's ICICI account?

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: In India, any money received from abroad is subject to scrutiny under the Income Tax Act.

However, gifts from relatives are tax-free in India.

A brother is considered a relative under the Income Tax Act, so gifts between siblings are exempt from tax.

What You Should Be Aware Of
1) Source of Funds
The money must come from a legal source.

Ensure that your brother can provide proof of the source of funds if required by the authorities.

2) Reporting the Transaction
Large transactions (above Rs. 10 lakh) need to be reported to Income Tax authorities.

If you receive Rs. 15 crores, it may be flagged for monitoring, and you may need to provide explanation and source details.

3) Repatriation Process
Ensure the money is sent through proper banking channels.

RTGS/NEFT/IMPS from an NRI account to your Indian account will ensure the money is tracked properly.

No Immediate Tax Liability for Gift from Brother
If your brother is gifting the amount to you, no tax is applicable as it is treated as a gift from a relative.

However, if the money is for business transactions or repayment of loans, it may attract tax or require documentation.

Final Insights
Receiving a gift of Rs. 15 crores from your brother is not taxable, as siblings are considered relatives.

Ensure the transaction is done via legal channels and keep all relevant documents.

Reporting large amounts to the Income Tax Department is a good practice.

Best Regards,

K. Ramalingam, MBA, CFP,

Chief Financial Planner,

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

Ans: This transaction may not incur tax liability but you need to consult CA for accurate guidance

Vipul Bhavsar
Chartered Accountant
www.capitalca.in