In brief
The equity-gains threshold is not a separate allowance for every fund or broker. A qualifying gift does not reset the asset’s cost to market value. Whether a recipient’s own threshold helps depends on genuine ownership, the recipient’s other gains and clubbing rules. Debt-oriented and other specified funds can follow different rules.
Start with Income Tax Department: Section 198: qualifying equity capital gains (opens in a new tab)
Keep citizenship, tax residence and FEMA residence separate
These labels answer different questions. Your nationality or OCI card does not alone determine the year’s Indian tax treatment. Establish the relevant year, travel history, income sources and exceptions.
Your next steps
0 of 5 steps complete · Next: Identify the asset and period
Identify the asset and period
Next stepRecord scheme classification, acquisition date, proposed gift and sale dates, and both people’s tax and FEMA status.
Check whether the gift is legally permitted
Ask the fund or depository and a CA about the transfer route, relationship-based provisions and cross-border restrictions before moving units.
Check who will be taxed
Ask specifically about gifts to a spouse, son’s wife or minor child, revocable arrangements and any retained benefit.
Keep the acquisition and transfer records
Preserve original acquisition costs, holding records, transfer proof and the recipient’s aggregate gains for the year.
Obtain a written calculation before acting
Have both countries’ tax consequences and reporting reviewed. Only then decide whether a genuine gift fits your family’s intentions.
Suggested preparation sequence. Your authority may require a different order. Progress stays on this device.
What to have ready
0 of 4 preparedKeep documents in your own secure records. Tick what you have; nothing is uploaded.
Model the decision with your own figures
Prepare the dates, currencies, costs and amounts you know. Keep tax eligibility, provider access and uncertain assumptions on your adviser’s question list. The calculators show those assumptions explicitly.
For a return to India, add education, parents’ support, healthcare, partner income and locked funds to the household timeline. Bring supporting-tool figures into it only after reviewing timing, currency and overlap.
Questions to take to an adviser
- Does clubbing attribute this gain to the donor?
- Is this fund eligible for the equity-gains threshold?
- What ownership, FEMA and foreign-tax consequences follow?
Who can help
A CA experienced in investment taxation and the relevant non-resident transfer rules; a residence-country adviser for foreign consequences.
Check an adviser before paying or signingClaims, exceptions and the supporting evidence
Check what you may have heard
Source review: 5 September 2026 · Rules may change after this date.
Every investor pays 12.5% on all share and mutual-fund gains.
The ₹1.25 lakh aggregate annual threshold and 12.5% rate concern qualifying long-term equity gains with prescribed conditions. They are not a universal rule for every mutual fund; surcharge and cess can also matter.
Gifting investments to relatives guarantees zero capital-gains tax.
A qualifying gift and a later sale are separate tax events. Previous-owner cost can carry over, and clubbing can attribute income back to the donor. A real transfer of ownership, recipient eligibility and cross-border rules require review.
Sources & review limits
Published by NRIdisha. Prepared with AI assistance. No individual author or qualified professional reviewer is credited for this guide.
Official sources support the statements they address. They do not certify this guide or your eligibility. Open the source and check current amendments before acting.
Income Tax Department (opens in a new tab) · Reserve Bank of India (opens in a new tab) · National Portal of India (opens in a new tab)
12.5% rate above the aggregate ₹1.25 lakh threshold, with asset and STT conditions under the 2025 Act.
Cost rules for assets obtained through gifts, wills and inheritance.
Effective from 1 April 2026. Sections 70, 92 and 99 address transfers, gifts and clubbing; sections 82 and 85 address specified reinvestment relief.
Asset classification and exemption overview. This page uses legacy 1961 Act section numbers; match the transaction period.
Keep this page’s title, the exact statement and the official source. Email them to support@nridisha.com. Do not include personal documents.