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Process for transferring physical shares by gift deed in India:

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  • Process for transferring physical shares by gift deed in India:

    • Gift Deed: This document formalizes the gifting of shares. It should be drafted on stamp paper of appropriate value (varies by state) and include details like:
      • Donor (gifter) and donee (recipient) information
      • Description of shares (company name, number of shares, certificate details)
      • Declaration of gift by donor
      • Signatures of donor and witnesses (at least two)
    • Share Certificate: The physical certificate representing ownership of the shares needs to be handed over to the donee.
    • Form SH-4: This is the transfer form prescribed by the Companies Act. It needs to be filled and signed by both donor and donee.

    1. Prepare the Gift Deed: Consult a lawyer to ensure the deed is drafted correctly and complies with legal requirements.
    2. Sign and Witness the Deed: Both donor and witnesses need to sign and date the gift deed.
    3. Stamp the Deed: Affix a stamp paper of the required value (varies by state) on the deed.
    4. Complete Form SH-4: Fill out the form with details like company name, share certificate details, and information of both donor and donee.
    5. Submit Documents to the Company: Within 60 days of executing the gift deed, send the following documents to the company's registrar:
      • Duly stamped gift deed
      • Original share certificate
      • Completed Form SH-4

    MCA Filing:

    Currently, there's no requirement to file the gift deed or transfer documents with the Ministry of Company Affairs (MCA). The transfer gets registered with the company itself upon successful processing of the documents.

    Additional Notes:
    • Remember to check the specific stamp duty requirement for your state for the gift deed.
    • It's advisable to consult a tax advisor to understand any potential tax implications arising from the gift.

    For further details or complexities, consider seeking guidance from a legal professional specializing in corporate matters.
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  • #2
    Transferring physical shares by gift deed in India involves several steps and adherence to specific procedures. Here’s a detailed process to guide you through: Prerequisites:
    1. Gift Deed Preparation:
      • Prepare a gift deed on a stamp paper of requisite value (usually 0.5% of the market value of shares being transferred, subject to a maximum of Rs. 100).
    2. Stamp Duty Payment:
      • Pay stamp duty as per the relevant state regulations. This varies depending on the value of shares being transferred.
    3. Execution of Gift Deed:
      • The donor (current shareholder) and the donee (recipient) must sign the gift deed in the presence of at least two witnesses.
    4. No Objection Certificate (NOC):
      • Obtain a NOC from the company whose shares are being transferred. This confirms that the company has no objection to the transfer of shares.
    5. Share Transfer Deed:
      • Fill out and execute a share transfer deed (Form SH-4) along with the share certificates. This deed must be duly stamped and signed by both the transferor and transferee.
    6. Submission to Company:
      • Submit the share transfer deed, share certificates, and NOC to the company’s registrar or transfer agent within the stipulated time frame (usually 60 days from execution of the deed).
    Process Steps:
    1. Execution of Gift Deed:
      • Prepare the gift deed as per the format prescribed under the Indian Stamp Act, ensuring all necessary details like donor, donee, share details, etc., are accurately mentioned.
    2. Stamping of Gift Deed:
      • Stamp the gift deed as per the applicable stamp duty rates. This can be done at authorized stamp vendors.
    3. Witnesses:
      • The gift deed must be signed by the donor, donee, and at least two witnesses. These witnesses should not be beneficiaries of the gift.
    4. Execution of Share Transfer Deed:
      • Complete Form SH-4 (share transfer deed) with details of shares being transferred, along with the share certificates.
    5. Submission to Company:
      • Send the completed share transfer deed, share certificates, and NOC to the company’s registrar or transfer agent.
    6. Processing by Company:
      • The company will verify the documents and, upon satisfaction, update its records to reflect the transfer of shares in the name of the donee.
    7. Issuance of New Share Certificates:
      • After processing, the company will issue new share certificates in the name of the donee.
    8. Updating Demat Account (if applicable):
      • If the shares are in dematerialized form, the donee’s demat account will be updated with the transferred shares.
    Additional Considerations:
    • Income Tax Implications:
      • Consult a tax advisor regarding any tax implications on the gift of shares, as per the Income Tax Act provisions.
    • Legal Advice:
      • It’s advisable to seek legal advice to ensure compliance with all legal requirements and to draft the gift deed correctly.
    • Timely Submission:
      • Ensure all documents are submitted to the company within the specified time frame to avoid any complications or delays.
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    • #3
      Here are the key steps for transferring physical shares by gift deed in India:
      1. Obtain Share Transfer Deed: The transferor (the person gifting the shares) and the transferee (the person receiving the shares) need to complete and sign a Share Transfer Deed. This document outlines the terms of the gift transfer.
      2. Obtain Signature Verification: The signatures on the Share Transfer Deed need to be verified by a Notary Public or a Magistrate.
      3. Submit Documents to Company: The completed and signed Share Transfer Deed, along with the original share certificates, need to be submitted to the company whose shares are being transferred.
      4. Company Approval: The company will review the transfer documents and, if approved, will register the transfer in their records.
      5. Get New Share Certificates: Once the transfer is registered, the company will issue new share certificates in the name of the transferee.
      6. Stamp Duty Payment: Depending on the state, applicable stamp duty needs to be paid on the Share Transfer Deed. This is typically 0.25% of the face value of the shares.
      7. File Form SH-4: The transferor needs to file Form SH-4 (Securities Transfer Form) with the company to complete the gift transfer process.
      8. Update Demat Account: If the shares are held in dematerialized (demat) form, the transferee needs to update their demat account with the new share details.
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      • #4
        Transferring physical shares by gift deed in India involves several steps, including legal documentation and compliance with regulatory requirements. Here is a detailed process to follow:
        1.Drafting the Gift Deed
        • Preparation: The donor (person giving the shares) must draft a gift deed that specifies the details of the transfer.
        • Content: The gift deed should include the names and addresses of the donor and the donee (person receiving the shares), a description of the shares being transferred, and a declaration that the transfer is a gift.
        • Stamp Duty: The gift deed must be executed on a non-judicial stamp paper of appropriate value, which varies depending on the state where the deed is executed.
        2. Signing the Gift Deed
        • Execution: The gift deed must be signed by the donor and the donee.
        • Witnesses: The deed should be signed by two witnesses who attest to the transaction.
        3. Notarization and Registration (if required)
        • Notarization: Although not mandatory, it is advisable to notarize the gift deed to add a layer of authenticity.
        • Registration: In some states, registering the gift deed with the sub-registrar’s office is necessary, especially if it involves significant value. Check local regulations to confirm if registration is required.
        4. Endorsement on Share Certificates
        • Endorsement: The donor must endorse the share certificates in favor of the donee by signing on the back of the certificates.
        • Signature Verification: The signature of the donor should be verified by their banker or a competent authority.
        5. Transfer Deed (Form SH-4)
        • Completion: The donor and donee must complete a share transfer deed (Form SH-4) in duplicate.
        • Stamp Duty: Affix share transfer stamps on the Form SH-4. The value of the stamp duty is typically 0.25% of the market value of the shares being transferred.
        6. Submission to the Company
        • Documents: Submit the following documents to the company’s registrar or transfer agent:
          • Original share certificates
          • Duly executed and stamped Form SH-4
          • Gift deed
          • Identity and address proofs of both donor and donee
        7. Company Processing
        • Verification: The company will verify the documents and process the transfer.
        • New Share Certificates: The company will issue new share certificates in the name of the donee and update its register of members accordingly.
        8. Intimation to Stock Exchanges (if applicable)
        • Listed Companies: If the shares belong to a listed company, the company may need to inform the stock exchanges about the transfer as per SEBI regulations.

        Transferring physical shares by gift deed in India involves the following key steps: drafting and executing a gift deed, endorsing the share certificates, completing Form SH-4 with appropriate stamp duty, submitting the necessary documents to the company, and waiting for the company to process the transfer and issue new share certificates. Ensuring compliance with all legal and regulatory requirements is crucial for a smooth transfer process.

        Last edited by AditiArora; 06-17-2024, 06:44 PM.