Queries on taxation on sale of inherited shares

Dear Sir,

My father who died in January 2019, bequeathed shares with a market value of Rs 1.1 crore to my sister, who is a USA citizen. He acquired these shares over many decades holding them as a long term investor and accumulating bonus shares.

Since my father was not aware of the procedure to transfer these shares to her during his lifetime, he made me the nominee with instructions to ensure that the shares are transferred to my sister.

My sister would like me to sell these shares and remit the proceeds to her bank account in the USA.

What would be the tax implications of such sale and remittance?

I understand from reading your previous answers that inheritance by itself has no tax implications.

Pls also advise the significance of valuation as on January 31, 2018 to this question.

Thanking you in advance.


asked May 25 '19 at 10:42 by Akand S 11

From 1st April 2018, long term capital gains on the sale of equity shares will remain exempt up to Rs. 1 lakh per annum. Tax at @ 10% will be levied only on LTCG on shares exceeding Rs 1 lakh in one financial year.

Long term gains = Selling price - Cost of Acquisition

Cost of Acquisition for computing gains would be:

  • The actual Cost of Acquisition of such investments; and
  • The lower of- a. Fair Market Value (‘FMV’) of such investments (highest price quoted on the recognized stock exchange on 31 January 2018); and b. the Full Value of Consideration received or accruing as a result of the transfer of the capital asset i.e. the Sale Price

After you paid tax on gains, you can transfer the amount to your sister as a gift.

answered May 25 '19 at 15:54 by Pankaj Batra 5.2k320


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Asked: May 25 '19 at 10:42

Seen: 1,342 times

Last updated: May 25 '19 at 15:54