IPO – Retail Limit

POSTED BY Raman ON October 29, 2010 5:10 pm COMMENTS (7)

Hi everybody,

It seems, SEBI has increased Retail limit from 1 Lac to 2 Lacs… Even though its good for us retailers, but u’stand there is going to be a screening on the applications above 1Lac…

I just wanted to know that when the investor makes an application for more than 1Lac, in the name of his wife or retired parents and the amount goes from him, what impact will have in the investor with regards to Tax……..


7 replies on this article “IPO – Retail Limit”

  1. Raman says:

    Thanks Bharat & Anil for your reply…

  2. Raman says:

    @ Bharat – Thanks for the information which duly noted…

    @ Anil – Thanks to you too for letting me know about your experience…

  3. Anil says:


    I have done this in the past and my tax consultant clearly asked me to prepare proper gift deed everytime I transfer my salary money from my bank account to my wife’s account for investing in share. I do this mainly to apply for IPOs in both my and my wife’s name.

    I’m a long term investor and hence do not know if there is no need to prepare gift deeds for short term investing (like listing gains or selling the share back in same financial year etc.,).

    1. Raman says:

      Thanks Bharat and Anil for giving me such a useful information…

  4. Raman says:

    Hi Bharat,

    Thanks your reply, but do you think we have to make a proper documentations at the later stage if required by the authorities, either for a gift or loan.

    Will Bank Transfer itself proves to be a proper document to show them that money is coming from either husband/son…


    1. bharat shah says:

      i think, if it is as loan, it is sufficient to have entries in your a/cs( of the concerned members of family). for gift , as you transfer your money,being movable asset ,handing over through bank,should be considered transfered without any consideration complete as gift. however , for better record, a gift deed on rs.10/- paper, with acceptance of the gift by donee’s signature, would be better. however better you take advise of the advocate, if the a/m. is sizable. you may be aware the clubbing provision of the income on such gift with donor, if the donee would be wife/minor child (however income on income would be donee’s own income.)

  5. bharat shah says:

    i think, cheque from third party with the application is not allowed. if you have transfered the a/m to your parents/wife, the tax implication would be as you treat as gift or loan to them.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.