Gift Of Shares – Compliances And Issues

Gift is a transfer of movable or immovable property from one person to another without consideration. Shares of an Indian company or of a company incorporated outside India can be gifted to another person (relative or otherwise) by following certain procedures and subject to compliance under different legislations.

This article focuses on the permissibility of gifting securities under the relevant provisions of Foreign Exchange Management Act, 1999 (FEMA) and rules, regulations made thereunder and the tax implications, as of date, on such gift of securities.

Permissibility of gifting of shares involving a Non-Resident under FEMA

In case of Gift of shares of an Indian Company involving a Non-Resident