Partha Ghosh (IT-Head) 11 July 2018

Gift deed registration process for shares-movable property .

My mother has decided to gift me (son-22 years of age) shares worth around Rs 7 Lacs (FMV) and the same will be excuted by online Demat-Demat transfer but I would like to execute a gift deed for the same event (for future tax implications | if any arises ) and have drawn up the wording for the same. Though I have the following doubts :-
1> What will be the value of the stamp paper on which the gift deed needs to be printed?
2> Does the deed needs to be registered and if so where & what is the process for registration of it ?

Please reply me as per the laws applicable in Kolkata,WB .

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6 Replies

G.L.N. Prasad (Retired employee.) 12 July 2018

Go to a local professional solicitor for drafting and do not take any risk in investments and taxations.

Partha Ghosh (IT-Head) 12 July 2018

The drafting has been done by an professional CS .Though as she is based in pune .She couldn't tell me the stamp paper applicable as per the rules in Kolkata (as it is different for every state) .

R.Ramachandran (Advocate) 12 July 2018

1. First, your mother has to give a Registered Gift Deed, gifting the shares in question, clearly specifying and indicating the Share particulars and the number of shares that is being gifted etc. and the Demat Account in which it is currently held.

2. For Gift Deed between relations, the Stamp Duty payable (Non-judicial stamp paper to be used) in West Bengal is 1/2 % of market value of the subject matter of the Gift.

3. Once the Gift Deed is so executed and registered with the Sub-Registrar's office, a request has to be sent by your Mother to the Company concerned, stating that she is holding so much number of shares, and that she has gifted the said shares to ...... vide Registered Gift Deed (copy of which is enclosed), and requesting that the said shares be transferred to the De-Mat Account, Dp-ID of the beneficiary.

4. The above is the correct procedure.

5. Instead, if your mother excutes by online Demat-Demat transfer of the shares from her Demat to your Demat, it would amount to "transfer" (not Gift) and she would be liable to pay Capital Gains Tax.

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Partha Ghosh (IT-Head) 12 July 2018

Thank You for your earnest reply and also assisting me by pointing out the fallacy in certain parts of my procedure.

Though regarding the value of the Non-Judicial Stamp-Paper ,you mentioned that it should be 0.5% of the market value. So, for the calculation of the market value which rate should be considered .The closing rate of the stock for the day before or the closing rate of the stock on the day the gift deed is to registered .

Partha Ghosh (IT-Head) 12 July 2018

Thank You for your earnest reply and also assisting me by pointing out the fallacy in certain parts of my procedure. Though regarding the value of the Non-Judicial Stamp-Paper ,you mentioned that it should be 0.5% of the market value. So, for the calculation of the market value which rate should be considered .The closing rate of the stock for the day before or the closing rate of the stock on the day the gift deed is to registered

WARRIOR 4 RIGHT (Consultant) 13 August 2018

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