# How to gift stocks and mutual funds tax-free this festive season

> Gift stocks and mutual funds tax-free for family during festive season with demat transfers.
- Title: How to gift stocks and mutual funds tax-free this festive…
- Summary: Gift stocks and mutual funds tax-free for family during festive season with demat transfers. You can gift demat-held stocks and mutual funds to relatives…
- Keywords: demat, mutual funds, stocks, tax rules, festive season, gift, relatives, non-relatives, funds, transfer, taxation, gifts
- Source: mint — https://livemint.com/money/personal-finance/how-to-gift-stocks-mutual-funds-tax-rules-india-festive-season-11792379250641.html
- Author: Jash Kriplani
- Published: 2026-10-19T06:00:45+00:00
- Read time: 1 min
- Topics: demat, mutual funds, stocks, tax rules, festive season, gift, relatives, non-relatives, funds, transfer, taxation, gifts
## Demat-held securities
You can gift demat-held stocks, ETFs, or mutual funds directly to a recipient's demat account without selling them.

> Investors can gift shares, ETFs, mutual funds held in demat form and other eligible securities, provided the holdings are free from pledges, lock-ins or other transfer restrictions
## Off-market transfer process
The sender must add the recipient as a beneficiary using their PAN and 16-digit demat account number before initiating the transfer.
## Direct transfer via CDSL Easiest
For recipients with different brokers, use CDSL Easiest to initiate off-market transfers without the recipient's account being with the same broker.
## DIS method
The sender fills a delivery instruction slip with recipient details and transfer date, then submits it to the broker for execution.
## Mutual funds in SoA form
Units held in SoA form can be gifted directly to non-relatives after updating KYC and validating the folio status.
## Tax implications for relatives
Recipients who are relatives receive tax-free gifts regardless of the value of the financial asset.

> If the recipient is a relative, there is no tax on receipt of the financial asset, regardless of the value
## Tax implications for non-relatives
Non-relatives face tax on gifts exceeding ₹50,000 at the applicable slab rate when the asset is sold.

> If the value of the financial asset exceeds ₹ 50,000, it is considered as income from other sources, where the recipient is taxed at the applicable slab rate
## Grandfathering clause
Equity mutual funds bought before 31 January 2018 have special tax rules for capital gains.

> Equity mutual funds bought on or before 31 January 2018 have a special rule. Gains made up to that date are not taxed
## Fifo transfer rule
Transferred mutual fund units follow a first-in, first-out basis with a ten-day lock-in period to prevent fraud.

> Units move on a first-in, first-out (Fifo) basis, so the oldest units go first. To protect against fraud, the transferred units are locked from redemption for ten days
## Key takeaway

You can gift demat-held stocks and mutual funds to relatives tax-free, with non-relatives taxed at market value if over ₹50,000.