Upgrad LLM

capital gains taxation on shares/mutual funds


Hello Experts, I am 34 yrs old male indian citizen living abroad temporarily since 2005 .

As a son to my mom, I want to transfer my personal funds available in my abroad bank account (earned thru my salary alone ) to my mom's (age 54) indian bank account and use those funds to buy shares and mutual funds on my mothers name. The reason I want to do that is to avail the 0% tax for Long Term Cap gains and 15% for short term capital for indian residents , as I am abroad currently on a temporary basis and have plans to return in 5-10 years down the lane, and then inherit those funds to my name and my children name when i return. If i get permanent PR of abroad country mean while, i have to pay taxes to abroad country irrespective of wherever i make some income.so i want to put on my mothers name.

In this regard, i have couple of questions

1) are there any limits on money that can be transferred from SON to MOTHER bank account every month, as i am any way  transferring only my savings money for which i already paid taxes abroad.

2) Since my mother have to any way pay taxes both STCG and LTCG, do you see any issue with my above.

Appreciate your help.

 
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Advocate

1. There is no monetary limit for you to remit to your mother from out of your tax paid money.

2. If your mother is expected to hold the shares/mutual funds for long term benefits, she is not liable for any income tax on those investments,.  However, if the she will be holding the investments only for short term, then she is liable to pay the applicable Short term Capital Gains tax.  There are no other taxation issues.

 
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Thanks a lot for your reply Mr R Ramchandran. Appreciate your help.

 
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