Introduction
Birthdays come and go, and so do most gifts. But what if you could give something more lasting and meaningful than cash or gadgets? Gifting stocks or SIPs (Systematic Investment Plans) is becoming a popular way to celebrate loved ones’ special days—combining thoughtfulness with the power of investing for their future. This guide will show you how to gift shares or SIPs simply and legally, making your present truly unforgettable.
Why Gift Stocks or SIPs Instead of Cash?
- Long-Term Value: Unlike cash, investments have the potential to grow over time, creating wealth for future goals—education, marriage, or even early retirement.
- Financial Learning: It’s also a great way to introduce younger generations or family members to the world of investing and financial planning.
- Personal and Unique: A gift that aligns with someone’s financial goals leaves a lasting impact, showing care beyond the moment.
How to Gift Stocks in India?
- Both Should Have Demat Accounts
To gift shares, both you and the receiver must have demat accounts with depositories like NSDL or CDSL. This electronic account holds and manages shares safely. - Initiate the Transfer via Your Broker
Log in to your trading account and use the ‘gift shares’ or ‘off-market transfer’ option.
- Select the stocks you want to gift.
- Enter recipient details like demat account number and name.
- Confirm and submit the request. Some brokers allow gifting online; others may require a form.
- Recipient Accepts the Gift
The recipient will get a notification (email/SMS) and must accept the gift within a set period—usually 7 days. - Complete the Transfer
After acceptance, you may need to authorize the transfer using a TPIN or digital signature. Once done, shares move from your demat to the recipient’s. - Be Aware of Fees and Charges
Gifting shares typically involves a small fee—around ₹25 per security plus GST, automatically deducted.
How to Gift SIPs or Mutual Funds?
- KYC Compliance
Both you and the recipient must be KYC compliant, with PAN, Aadhaar, and bank details verified. - Transfer Via Asset Management Company
If units are in folio form (non-demat), fill a transfer request form with details like folio number, fund name, and number of units to transfer. Submit with proof of identity for both parties. - Demat Form Transfers
Mutual fund units held in demat form can be gifted just like shares via the demat account transfer process. - Recipient Becomes Owner
Once transferred, the recipient owns the units with all associated rights, including dividends or capital gains.
Important Tax Points to Know
- Gift Tax: There is no separate gift tax, but gifts exceeding ₹50,000 may be taxable in the hands of the recipient if they are non-relatives. Gifts to close relatives like children, spouse, or parents are tax-exempt.
- Capital Gains Tax: The recipient pays capital gains tax when they sell the gifted securities based on the original purchase price and holding period of the giver.
- No Tax on Gift Transfer: The act of gifting itself does not trigger capital gains tax for the donor.
Why This Makes for a Perfect Birthday Gift
Beyond the immediate joy, gifting stocks or SIPs sets the foundation for financial independence and future prosperity. It teaches the value of saving and investing and can spark lifelong financial conversations. It’s a gift that keeps growing—just like your relationship.
Conclusion
Gifting stocks or SIPs is a meaningful, modern way to celebrate birthdays. With an easy process, modest charges, and favorable tax rules, anyone can gift financial assets with confidence and care. This year, consider making your loved one’s birthday extra special with a gift that truly lasts—a step toward their bright financial future.
FAQs
Yes, but both parties must have demat accounts for the transfer to happen legally.
Yes, mutual fund units can be gifted either in demat or folio form with required KYC compliance.
Gifts to relatives are tax-free. For others, gifts exceeding ₹50,000 are taxable in the recipient’s hands.
Yes, typically a nominal amount is charged.
They need to open one to accept gifted shares; this can be done online easily.
Yes, but managing the investment requires a guardian or parent’s involvement until the minor comes of age.
Once accepted and authorized, the transfer usually completes within 2-3 working days.
Yes, gifting even one share is possible and can be a thoughtful, symbolic gift.