What are the tax implications of grandfathering shares in India?
If after Jan 31, you sell the shares at a value of Rs 1.75 lakhs (say for example on Feb 21), then you pay tax on Rs 25,000 only (value as on Jan 31 minus sale value as on Feb 21). Had grandfathering not been introduced, you would be subject to capital gains tax on Rs 75,000 and not Rs 25,000.
How can I invest in a mutual fund scheme for my grandchildren?
There are two ways to invest in a mutual fund scheme for one's grandchildren. First, one can invest in one's own name and make the child a nominee through a will.
Can a grandfather invest in a scheme in the name of child?
Anil Chopra, Group CEO & Director, Bajaj Capital, says, "A grandfather can invest in a scheme in the name of the child. But parents are also required to sign on the form." To invest in the name of a child, he or she should have a bank account. The child should be the first and sole holder in the folio.
Can grandparents give money to grandchildren tax free in India?
Under the Income Tax Act, gifts received from specific “relatives” are not subject to taxation. Grandparents are also covered within the definition of specified relatives. Hence, cash gift received from your grand-mother will be fully exempt in your hands.
How can grandparents invest for grandchildren in India?
There are two ways to invest in a mutual fund scheme for one's grandchildren. First, one can invest in one's own name and make the child a nominee through a will. Second, one can invest in the name of the child as mutual funds are allowed to accept third-party cheques.
How can a grandparent invest for a grandchild?
This way you won't have to deal with an 18-year-old blowing thousands of dollars tricking out an old car.Savings Account. One of the easiest ways to save money for your grandchild is a savings account. ... Certificates of Deposit. ... Brokerage Account. ... UGMAs/UTMAs. ... 529 Education Savings Plans. ... 529 Prepaid Tuition Plans.
How much money can grandparents give grandchildren?
You may give each grandchild up to $16,000 a year (in 2022) without having to report the gifts. If you're married, both you and your spouse can make such gifts. For example, a married couple with four grandchildren may give away up to $128,000 a year with no gift tax implications.
What accounts can grandparents open for grandchildren?
A grandparent can open a savings account for their grandchild in the child's name as long as they have documentation, such as the child's birth certificate. There are lots of accounts specifically for children but the most important point is the rate paid, rather than any gimmicks.
Can grandparents open PPF account for grandchildren?
An individual can, hence, open one PPF account on behalf of each minor child of whom he/she is the guardian. Grandparents are not permitted to open a PPF for their grandchildren when the parents of the minor are still alive. Birth certificate is also a document required for minors as age proof.
Can I buy shares for my grandchildren?
Alternatively, you can buy shares in your own name and transfer them into someone else's name through an off-market transfer. This involves contacting your broker or the company's share registry, explaining what you're after and completing some paperwork. A small fee (often less than $50) usually applies.
Can I gift stock to grandchildren?
Can I Gift Shares to My Child or Family Member? Yes. You may gift shares to a person of any age without taxable consequence if the amount given is under $16,000 per person per year.
What is the best way to leave money to grandchildren?
One of the most preferred ways to leave assets to grandchildren is by naming them as a beneficiary in your will or trust. As the grantor or trustor, you are able to specify a set amount of money or a percentage of your total accounts and property to each grandchild as you see fit.
How much can a grandparent gift tax-free?
$15,000 a yearGive cash You may give up to $15,000 a year to each grandchild in 2021 without having to report the gifts or being affected by any federal tax consequences. For married couples, that holds true for each partner. And they can give that amount to as many grandkids as they want.
How much money can a parent gift a child in 2021?
$15,000In 2021, you can give up to $15,000 to someone in a year and generally not have to deal with the IRS about it. In 2022, this increases to $16,000. If you give more than $15,000 in cash or assets (for example, stocks, land, a new car) in a year to any one person, you need to file a gift tax return.
Can I give my grandchildren money tax-free?
Technically, you can gift as much money to your children or other family members as you like, but in order for your gift to be Inheritance Tax-free, you would need to live for at least seven years from the date the gift is made.
Tax on long-term capital gains made from sale of equity mutual funds is applicable from April 1, 2018. However, gains made till 31 January 2018 have been grandfathered
The tax is applicable on LTCG made by the investor over and above Rs 1 lakh a year.
1 Comments on this Story
If NAV at the time of redemption is lower than the NAV of 31st Jan.2018 is this considered as LONG TERM CAPITAL LOSS (LTCS) ?
When is the grandfather concept?
The grandfather concept implies that all the capital gains accrued on equity/ mutual funds until January 31 will be exempt from taxation. As the new financial year has kicked off, the income tax (I-T) department's new rules, announced by Union Finance Minister Arun Jaitley on February 1 at the time of announcement of Budget, have come into force.
What is grandfather clause?
The grandfather clause will help lower tax outgo on sale of mutual funds/ equity. As the new financial year has kicked off, the income tax (I-T) department's new rules, announced by Union Finance Minister Arun Jaitley on February 1 at the time of announcement of Budget, have come into force. One of the major put-offs for regular stock market ...
When are capital gains grandfathered?
Any gains prior to January 31 are grandfathered. This means the capital gains will be zero if the sale price of equity/ mutual funds is more than the cost of acquisition but less than the value on January 31. 4. The tax payer will stand to gain when the shares market price on January 31 was lower against the acquisition cost.
Is LTCG grandfathered?
2. The income, accruing on the long term capital gains (LTCG) on listed equities/mutual funds has been grandfathered for the residents, and for the non-resident assesses.
When did Mr. X buy equity shares?
Mr. X bought equity shares on 21-Dec-2016 for Rs. 17,000. FMV of the shares was Rs. 9,500 as on 31-Jan-18. He sold the shares on 21-May-2018 for Rs. 7,000. What will be the long-term capital gain/ loss?
Is LTCG taxable?
The LTCG can be taxable under two things—the exemption for LTCG up to Rs.1 lakh, and the grandfathering provision.If you had invested in equity mutual funds or shares before 31 January 2018, any gains till that date will be considered as grandfathered and thus will be exempt from tax.
What are the rights of a grandson in India?
Grandson's Rights in Grandfather's Property. A grandson's right to grandfather's property depends upon the applicable inheritance law. There is no uniform Law of Inheritance in India. Succession and inheritance are subject to various personal laws, depending upon religion. Let us examine a Hindu grandson's rights in his grandfather's property, ...
What are the rights of a Hindu grandson?
Let us examine a Hindu grandson's rights in his grandfather's property, based on the type of property and the succession rules. Property can either be self-acquired or ancestral. Ancestral property is passed on through generations—the right to inherit such property vests since birth and not depend upon the owner's death.
What happens to the grandfather's property if the mother is alive?
In such a case, the share of the grandfather's property the parent in question would have inherited if they were alive will be divided amongst the mother (if she is alive) and the grandchild and their siblings. The siblings, and the mother, will divide this share equally. The siblings will both get equal shares.
What happens to a grandson's property?
A grandson owns a share of his grandfather's property since birth. Distribution of property happens in such a way that each share gets further divided into successive generations. For instance, if the father inherited 50% of the property, the grandsons would inherit 25% each in their grandfather's property.
Can a grandson inherit his grandfather's property?
A grandson, on the other hand, has a right to inherit his grandfather's property since birth. A father can exclude his child from his self-acquired property, but a grandson cannot be exclu ded from his grandfather's property if the property is ancestral.
Does a grandchild have equal rights to ancestral property?
While a grandchild or a grandson has equal rights in ancestral property, such rights do not exist in a self-acquired property. Let us see what the rights of a grandson on his grandfather's property are.
How old do you have to be to buy a grandparent's insurance?
Consent is a certification given by parents that they do not have any objection to it.". Generally, only grandparents up to 60 years of age can buy a policy. After this, there is vesting period of 15 years. So, a grandparent who is 60 can continue the policy till only 75 years of age.
Can I buy insurance for my grandchild?
One can also buy insurance for the grandchild by making him or her a nominee. However, this requires written consent from parents. Pradeep Pandey, Chief Marketing Officer, Future Generali Life, says,"Parents' consent is needed for a grandparent to buy a policy for his grandchildren.
Is a gift to a grandchild taxable?
The investments done by grandparents in the name of grandchildren are a gift and not liable to tax. Vineet Agarwal, Partner, KPMG in India, says, "Any income arising from such gifted amount will be taxable in the hands of the grandchild. However, if the grandchild is a minor, the income is clubbed with that of the parent whose taxable income is higher. Such parent shall be eligible for a deduction of Rs 1,500 from his or her taxable income."
Can a grandfather invest in a scheme in the name of a child?
Anil Chopra, Group CEO & Director, Bajaj Capital, says, "A grandfather can invest in a scheme in the name of the child. But parents are also required to sign on the form.". To invest in the name of a child, he or she should have a bank account. The child should be the first and sole holder in the folio.
Can I invest in a mutual fund for my grandchildren?
There are two ways to invest in a mutual fund scheme for one's grandchildren. First, one can invest in one's own name and make the child a nominee through a will. Second, one can invest in the name of the child as mutual funds are allowed to accept third-party cheques. Anil Chopra, Group CEO & Director, Bajaj Capital, says, ...
Can you invest in your grandchildren's name?
However, many times they just hand over money to the parents as they are not aware of the investment instruments that the grandchildren can access when they grow up. There are several plans and policies in which one can invest in the name of grandchildren. But remember that for this, parents' signature and consent are must.
Can a grandparent buy life insurance?
The child will be a nominee in the policy.". Grandparents can also buy a life insurance policy in the child's name.