Your Queries: What is the best way to transfer holdings?

Updated: Nov 24, 2020 1:19 AM

Gifting of shares to relative does not attract any tax liability

The CBDT also clarified that in a case where Mutual Agreement Procedure (MAP) resolution is pending or the assessee has not accepted MAP decision, the related appeal shall be eligible under 'Vivad se Vishwas'.

By Chirag Nangia

I intend to gift all my share holdings to my son who is unemployed and doesn’t file any return. What is the best way to transfer the holdings? What shall be his tax liabilities?
—Rajinder Pal Singh

Gifting moveable property (shares in your case) to relatives does not trigger taxation. Therefore, you may transfer shares to your son without attracting any tax liability in his hands. Further, when he finally sells these shares received as a gift, he shall be entitled to include in his period of holding, the period for which the shares were held by you. Moreover, the cost for which you acquired the shares may be treated as your son’s cost of acquisition.

I have an FD in Punjab & Maharashtra Cooperative Bank (PMCB) since 2015. Now the bank is under RBI under rule 35A. As per Form 26AS, there is TDS deduction on interest paid by PMCB. Same is reflected in my ITR. How should I file ITR for this interest? How can I claim this TDS waiver on interest?
—Ashwini KY

PMCB is liable to pay such interest to the depositors even though it is presently restricted from making payment to depositors. If a bank is crediting interest in its books in favour of depositors, it is liable to deduct tax. If Form 26AS reflects TDS on interest accrued, you have to pay tax on the deposit, it cannot be excluded while filing return for AY 20-21. You may claim the credit of TDS from the final tax liability. If your total income is less than maximum amount not chargeable to tax, you may file form 15G/ 15H and ask the bank to not withhold tax at source.

What is the tax treatment for one-off transactions in case of futures and options? If it is a business income, can the loss be squared off from other incomes other than salary income and if loss is left over can it be carried over to the next eight assessment years?
—A G Kameswara Rao

In case of one-off transactions, income from trading of futures and options may be considered as ‘Income from other sources’. You may report such income in schedule OS of the ITR form, wherein you shall be required to enter the sale value and claim the option premium as expense under section 57. The resultant gain/ loss shall be auto-computed by the ITR utility. This loss shall be set off against eligible income of the current year but shall not be carried forward.

(The writer is director, Nangia Andersen Consulting. Send your queries to

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