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How You Can Gift Shares, ETFs, Gold Bonds Online In India?
Other than gifting tech and fashionable products on various occasions which depreciate in value over time or may even be of no value after prolonged use, why not help your family and friends' build wealth and this in this digital age can be done easily as now via online means you can gift financial instruments such as stocks, ETFs, gold bond etc. This may even enable the recipient to start his or her investment journey.
Until now gifting of stocks or shares was possible through the offline route and entailed carrying out an off-market transfer (i.e. trade that does not involve stock exchanges) by filling up the delivery instruction slip or DIS and sending it over to the broker for completing the transfer process.
The DIS bears details such as names and DP IDs of both the transferor and transferee, client ID, scrip details along with number of shares to be transferred etc. The DIS also needs to include the date when the transfer has to be carried out or effected. And here one more step is involved that is the transferee needs to fill up a receipt instruction and submit the same with his DP as else until then the shares transferred to the beneficiary will remain with the DP and only after the said step is done shares will be transferred to the demat account of the beneficiary or transferee. Looks like a complex process.
But now the process has been simplified as digital broking firm Zerodha has launched a platform that enables online gifting of aforementioned financial securities.
On the launch, company's founder and CEO Nitin Kamath said that Zerodha always wanted to make gifting of stocks, mutual funds and bonds easier but getting it done through online means and making it seamless was not possible. "Thanks to the recently introduced CDSL's e-DIS (Electronic delivery instruction slip), we now have built a platform to gift stocks, ETFs, and gold bonds to your friends and loved ones," he added.
How To Gift Shares or Stocks, Gold Bonds, ETFs Online- The Process
• For gifting shares through online means, you would first need to have a Zerodha account
• Now head on to the stock gifting page on Console
• Add the beneficiary's name, select stocks together with the quantity, you wish to gift. Click confirm and Send button.
• The beneficiary or the recipient will get the details of the gift received as an SMS message and via e-mail
• Remember if the recipient does not has a demat account with Zerodha, he or she would need to open an account with them for credit of the securities. Also, the gift request comes with a validity i.e. of just 7 days and in case it is not accepted until then, the gift request shall stand cancelled after that.
• And as and when the recipient of the gift accepts the gift, you as a transferor or sender of gift shall receive an SMS and e-mail from Zerodha that will ask you to validate the details of the recipient and approve the shares that are to be transferred from your demat to the beneficiary's account using the CDSL TPIN.
• Now after you have given your approval for the debit of stocks from your account using CDSL TPIN, the brokerage firm will establish an off market gift transaction at CDSL which you need to verify using an OTP sent by CDSL. Shortly after the off-market gift transaction is set up by Zerodha, which happens at 5 PM on every trading day, you'll receive an email and SMS from CDSL with this link to verify the transaction through an OTP. You will be required to enter your PAN or 16 digit DP ID and generate the OTP. The OTP verification has to be done by 8 PM on the same day.
• On successful verification of the gift transaction, the stocks are transferred from your demat account to the recipient's demat account.
• For the gifting there is no additional charge. Off market transfer charge of Rs. 25 or 0.03 percent whichever is higher is applicable on such transfers.
Tax implication on gifting of shares, bonds and ETFs:
For the sender or the person gifting such instruments there is no tax liability. However for the recipient in case the gift values over and above Rs. 50000, tax implication may arise.
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