Process for transfer of securities to legal heir simplified: Sebi, Pg 17.

Key Highlights:

• SEBI simplified the process of transferring securities from a nominee to the legal heir.
• A new reporting code "TLH" (Transmission to Legal Heirs) has been introduced.
• The move aims to prevent the transaction from being incorrectly treated as a ‘transfer’ and taxed for capital gains.

Detailed Insights:

• Section 47(iii) of the Income Tax Act, 1961 exempts the transmission of securities to legal heirs from capital gains tax.
• The new reporting code "TLH" will ensure correct reporting of such transfers, preventing unnecessary inconvenience related to claiming refunds.
• The recommendation to use the "TLH" code came after consultation with the CBDT by a Working Group.

Key Concepts Involved:

• Securities: Financial instruments representing ownership in a public company.
• Legal Heir: A person legally entitled to inherit property from a deceased individual.
• Capital Gains Tax: A tax levied on the profit from the sale of assets.
• CBDT: A governmental body dealing with direct taxes.