Transfer of shares via gift deed

For transfer of shares, Company has no interest in consideration. Therefore shares can be transferred by duly filled up transfer deed. However for Income Tax purposes, Gift Deed should be preapred and executed.

Pl refer Sec.123 of Transfer of Property Act which provides as under:

For the purpose of making a gift of movable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery.

Such delivery may be made in the same way as goods sold may be delivered.

The transfer of shares although a gift will atract stamp duty (share transfer stamps), @ 0.5% of the consideration (being NIL in the instant case) or the market value on the date of execution, whichever is higher. If the shares are listed, the market value on the relevant date can be ascertained from the stock exchange/Company or its Registrars.

Vasudevan

Please note that the stamp duty is only 0.25% (typed as 0.5% by inadvertence).

Vasudevan