InvestorQ : What is the procedure of gifting a Mutual fund in India?
Neha Samdani made post

What is the procedure of gifting a Mutual fund in India?

Answer
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riya Ranade answered.
2 months ago


Unlike shares, mutual fund units can neither be transferred nor gifted to any other person. Therefore, in general, you cannot gift mutual fund units to any concerned person in India but there’s an exception to this rule, you can gift mutual fund units to a minor. So, if you are looking for a procedure to gift mutual funds to a minor, here’s how you can:

1) You need to start the investment in the name of the child and related form has to be signed by parent/guardian who shall have to complete the KYC formalities.

2) Documents for KYC will include, self-attested copy of PAN of guardian, birth certificate of a minor, canceled cheque of guardian bank account, and third-party declaration confirming the relationship between parent and child.

3) In the case, you are starting SIPs give ECS mandate for the direct transfer from the guardian’s bank account.

The above mentioned is a one-time procedure for making any investment in mutual funds and any subsequent investment with the same fund house will not require this process to be performed again.

These SIPs or mutual funds shall be suspended and transferred in the name of minor as soon as he turns 18, until then the account shall be operated by the guardian. In that case, fresh KYC documents (PAN and Bank account details) of the minor shall be submitted to the fund house to change the account status from major to minor.