Mutual Fund Gift 2025: The process for tax returns is going on in the country. People doing jobs and business are filing income tax returns at this time. So those people want to know how to save tax, so there are many ways by which tax exemption can be claimed. Here we are telling you how you can get tax exemption on gifting mutual funds.
Usually, people must have seen gifting things like land, house, jewellery, car and cash. Due to which mutual fund gift is one such way, which is given for better returns in future. This thing is related to the stock market. People can gift mutual funds to children or other family members and claim tax savings.
Read More: How to get a personal loan from SBI? Know the interest rate and EMI
Know what is mutual fund gift is.
If you want to gift mutual funds to your spouse, children, siblings or loved ones, then you must first have your mutual fund units in your demat account. You can send your mutual fund units from your demat account to the recipient of the mutual fund gift either online or offline. We are describing both the methods here.
Online method-
First of all, log in to your demat account online.
Go to the mutual fund section and select the transfer option.
Now select the fund and the number of units to transfer.
Select the account to which you want to gift your demat account.
After this, check the complete information here once and submit it.
Offline method-
First of all, get a transfer request form (CRF) from your depository participant.
Now fill in your details and mutual fund unit information in the CRF.
Submit the form and your mutual fund account details to your DP.
Now the further work will be processed here.
Tax benefits on a mutual fund gift
Let us tell you that under the Income Tax Act, tax liability arises on gifting mutual fund units. However, there are certain exemptions, such as gifts of mutual funds received from relatives (spouse, children and siblings), irrespective of the amount, are completely tax-free. If mutual fund units are being gifted to non-relatives, the value of which is more than ₹50,000, then the recipient is liable to pay tax on the entire amount.
If the recipient sells the gifted mutual fund units later, then capital gains tax will be applicable on them. If the gift is given to a minor child or spouse, then the earnings from the mutual fund units will be taxed in the hands of the giftee. But if the mutual fund gift is given to parents, adult children and siblings, then it will be taxable in their hands.