My father passed away recently leaving behind 65 lakhs in shares and 25 lakhs in FDs (Fixed Deposits). I am the joint holder in both the shares as well as the FDs. This amount has to be shared by me with my sister in the ratio 50:50. What are the tax implications for me? I don't come under tax bracket except for this.

Can I sell the entire shares now or should I wait for a year? What is the tax implication for me and my sister.

  • 1
    If you and your father were joint holders (payable to either or survivor) of the shares and the FDs, and nobody else (especially your sister) is a joint owner, then you own the shares and FDs outright. The same applies if you were the sole nominee (meaning that you had no right to operate the accounts while your father was alive but the account would be transferred to you upon the death of your father. So, the "amount has to be shared by me with my sister in the ratio 50:50" is either from a (possibly unsigned) will that your father left, or what he told you he wanted done with the money. Oct 24, 2014 at 22:40

2 Answers 2


I am the joint holder in both the shares as well as the FDs.

Assuming you were the joint holder only for convenience and the money actually belongs to you both. Even otherwise it does not change much.

For Shares the best way is have your sister open an Demat account. Transfer half the share to her via offline transaction. As the amount is large for an offline transaction, Bank or Income Tax may ask for clarification.
Option 1: You can submit your father's death certificate and an affidavit stating that you both jointly agree/decide to split these in the ratio of 50%.
Option 2: The other option is you execute a gift deed and transfer shares to your sister. Gift between close relations is tax free.

So either ways there will be no tax implications for you or your sister on this transaction. If you sister were to sell these shares, the date of vesting in option 1 would be when your father expire. i.e. if the value of share at that date were say 100 [doesn't matter at what rate your father purchased], and she sells for 150, 50 becomes the profit and depending on long/short term taxes will be applicable. If you go with option 2, the date when you execute the gift deed will be vesting date to your sister.

As you were join holder of the shares, I am not sure what would be considered a vesting date for you. Consult a CA who will be able to advise you better for a nominal fee of Rs 2000 - 3000.

Similarly for FD's you can transfer the ownership to your sister or liquidate them and transfer the cash.


As per Indian Tax Laws, shares which are held for more than 1 year are exempted from the levy of Tax.

Assuming that these shares were held by your father for more than 1 year - No tax would be levied on the sale of such shares.

In case these shares have been held for less than 1 year, the income applicable would be 15% of profits.

I have previously authored an article in this regard explaining the manner of levy of Income Tax on Sale of Shares and you can read it here - http://www.charteredclub.com/tax-on-sale-of-shares-mutual-funds/

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