Following are some of the key points to be remembered when you transfer shares to relatives

In case the shares are gifted to a blood relative as defined in Section 56(2) then the entire gift is exempt from tax irrespective of amount of the gift. However, any subsequent sale by the recipient will be subject to capital gains tax and the purchase price of the donor will be considered the acquisition price for the purpose of capital gains calculation.

However, gifts to persons other than blood relatives will be taxable in the hands of the recipient. It will be treated as taxable other income in the hands of the recipient and taxed at your peak rate.