Dear Mr. Sreekanth,
I am a US based NRI and I own some real estate and demat shares in India. Both of these were gifted to me by my family. If I want to gift half of these to my spouse:
- From your blogs, I understand that there are no gift taxes payable in India.
- From your blogs, I understand that my cost basis on sale would be my giftor's and the time held (for capital gains tax as well as indexation in real estate) would be calculated based on my giftor's purchase date.
- My understanding is that there is no need for my spouse to open a PIS account for these demat shares, since they are gifts. Is my understanding correct?
- Since I am gifting half of it to my spouse, how would capital gains (in India) on sale be calculated on my spouse's ownership interest? Would cost basis and time held be calculated based on the purchase price and date of my original giftor (for capital gains tax as well as indexation in real estate)?
3 Answers
Dear Mythili,
1 - Yes, no gift taxes payable (subject to certain terms & conditions).
Kindly read :
https://www.relakhs.com/gift-income-tax-rules-detailed-guide/
2 - Yes, your understanding is correct.
Kindly read :
https://www.relakhs.com/sale-gifted-property-capital-gains/
3 - Is your spouse also an NRI? I believe that Shares purchased under PIS can be gifted to family members by way of Gift to a Resident Indian (or) NRI without any prior approval from the RBI.
4 - Same as in Case - 2. (cost price of your original donor).
Yes, my spouse is also an NRI. The shares gifted to me by my family were not purchased under PIS. They were purchased while my family were residents in India. My understanding is that my spouse does not need to open a PIS account, when I gift him these shares. Please confirm.
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