Gifting shares is becoming increasingly popular in India. Instead of gifting cash or jewellery, many investors prefer gifting stocks to help their loved ones build long-term wealth. But how exactly do you transfer shares to someone else? What charges apply? Is it taxable? Who is considered a “relative” for tax-free gifting?

This guide explains everything — in a simple, step-by-step format.

1. Two Ways to Gift Shares

In India, you can transfer shares to someone through:

A. Offline Mode (Physical DIS Slip)

You fill a Delivery Instruction Slip (DIS) from your depository participant (DP) and manually submit it.

B. Online Mode (Through Broker Portal / App)

Brokers like Zerodha, Upstox, Angel One, ICICI Direct etc. allow online gifting of shares through their console or app.

Both are legal and recognized under the Depositories Act.

2. Offline Transfer (Physical Method)

This is the traditional method.

Step-by-Step:

Take a DIS slip from your DP (NSDL or CDSL participant).
Fill in the receiver’s DP ID, Client ID, Name, ISIN, and number of shares.
Sign and submit the DIS to your DP.
The DP processes the transfer within 24–48 hours.
The receiver gets the shares into their demat account.

Important:
Make sure the names match exactly; otherwise the DP will reject the transfer.

3. Online Transfer (Gifting Shares Through Broker)

Most modern brokers offer a simple online gifting system.

Below is the common flow (e.g., Zerodha Console):

Step 1: Log in to your Broker Console/App

Go to the section where share transfers are allowed.

Step 2: Click on “Gifts” or “Transfer Shares”

Every broker has a dedicated “Gift Stocks” option.

Step 3: Enter the Receiver’s Details

Name
Phone number
Email ID

The receiver will get a notification.

Step 4: Select the Shares You Want to Gift

Choose the stocks and quantities.

Step 5: Receiver Accepts the Gift

The receiver gets an SMS/email and must log in and accept the gift.

Step 6: Shares Move to Receiver’s Demat

Once accepted, shares are debited from your demat account and credited to theirs.

This process is entirely electronic and usually completes within 24 hours.

4. Charges for Gifting/Transferring Shares

CDSL/NSDL charge a Market Transfer Fee:

₹5 to ₹25 per ISIN (approx.)

Some brokers add:

DP charges: ₹13–₹20
GST: 18%

Example:
If you transfer shares worth ₹30,000, DP may charge:

Market transfer fee: ₹25
DP fee: ₹13
GST: ~₹6

Total: ₹44 (approx.)

Charges vary slightly by broker.

5. Tax Implications of Gifting Shares

A. Tax for the Giver

No tax.
Gifting is not taxable for the giver.

B. Tax for the Receiver

Depends on whether the giver is a relative or non-relative under the Income Tax Act Section 56.

6. Who Is Considered a “Relative”? (As per Income Tax Act)

Gifts from relatives are fully tax-free, regardless of value.

The following are treated as relatives:

Blood Relations

Father
Mother
Son
Daughter
Brother
Sister

Spouse Relations

Husband
Wife

Extended Relations

Father’s brother / Father’s sister
Mother’s brother / Mother’s sister
Spouse’s siblings
Son’s wife
Daughter’s husband
Grandparents
Grandchildren

All gifts to/from these people are tax-free.

**If the Receiver is NOT a Relative**

Gifts above ₹50,000 (FMV) become taxable as income in the receiver’s hands.

7. Tax at the Time of Selling Gifted Shares

When the receiver sells the gifted shares:

Cost of acquisition = original cost paid by giver
Holding period = counted from the giver’s purchase date

This affects LTCG/STCG calculation.

8. Summary

Topic	Key Point
Can you gift shares?	Yes, via offline DIS or online broker system
Is gifting taxed?	No, giver pays no tax
Receiver tax?	Tax-free if giver is a “relative”
Charges?	~₹5–₹25 per ISIN + DP charges
Offline mode?	Use DIS slip
Online mode?	Use broker’s “Gift Shares” option
Selling tax rules?	Original cost & holding period apply

How to Gift Shares in India: Offline & Online Methods, Charges, Tax Rules, and “Relative” Definition Explained