1) Cash
The good old cash is still a good option for brothers to their sister as there is no upper limit on gifting money to siblings and gifts from relatives are exempt from tax. So the recipient and the payer both are exempt from paying taxes.
2) Gold
Gifting gold or silver is another option as gold is evergreen and a great hedge in the time of uncertainties. It cannot necessarily be in physical form.
3) Mutual Funds
Mutual funds remain a viable option for those who want to have exposure to equities but do not want to sweat over finding stocks or managing their portfolios. You can buy a mutual fund for your sister could continue investing small amounts through systematic investment plan (SIP).
4) Fixed Deposits
FDs are timeless gifts which offer assured returns without undue risks attached to other riskier assets. 5) Stocks, ETF
You can also gift gems from your own portfolio by transferring shares to the demat account. In case you are planning for the latter, here is how you can do it.
Stocks transferred as a gift will give benefits from any gains in the stock’s price to the recipient. Giving stocks and other securities also have tax benefits for the donor in case prices appreciate, one can save tax outgo on the earnings or gains. Though the recipient will have to pay tax if he she sells these shares.
Transferring shares from one demat account to another can be done in two ways – online and offline.
Investors hold dematerialised securities in their demat accounts through two primary depositories — National Securities Depository Limited (NSDL) and Central Depository Services Limited (CDSL).
How to transfer shares offline?
Step 1: Fill Delivery Instruction Slip or DIS and give it to your broker.
Step 2: The broker will then send your request to the depository.
Step 3: The depository will move shares to the new demat account.
Step 4: The recipient’s accounts will show the details after the transfer process is completed.
Online Transfer
Step 1: Shares can be transferred via NSDL’s ‘Speed-e’/CSDL’s ‘Easiest’ facilities. One must register first and enter demat details.
Step 2: Fill the DIS form and submit to the website. Take the print out of the form and submit it to your broker.
Step 3: The broker will further submit your form to the depository to verify your details.
Step 4: After verification, your account will be activated and you will get login credentials through email. Now you can log in and transfer shares through your demat account.
Platforms like Zerodha also offer facilities of gifting shares, ETFs, and gold bonds. One needs to have/create a Zerodha account for this. Here’s how to do it:
Step 1: Log in to kite.zerodha.com.
Step 2: Click on Holdings.
Step 3: Hover over the security to be gifted and click on Options.
Step 4: Click on Send as a gift.
Step 4: Enter the gift receiver’s name, mobile number, email address (optional), and gift message (optional).
Step 5: Click on Continue.
Step 6: Select the securities that are to be gifted. Only the securities that are approved for gifting (DOC) are displayed.
Step 7: Enter the quantity.
Step 8: Click on Confirm & send.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)