Gift a SIP This Raksha Bandhan: 5 Things to Know

Gifting an SIP to your sister on Raksha Bandhan is possible but has a few rules. Transfer money to her account, let her invest in her own name, and ensure KYC is complete. Zero gift tax applies between siblings.

Here's what happened: Raksha Bandhan 2026 has sparked interest in gifting SIPs instead of gold or cash, but SEBI rules mean the SIP must be in the recipient's own name with her own bank account linked.. Under Section 56(2) of the Income Tax Act, gifts of money between siblings are fully exempt from gift tax — there is no upper limit when the donor is a blood relative.. For first-time investors, KYC completion through a SEBI-registered KYC Registration Agency is mandatory before any mutual fund investment can be processed..

What you should do: Transfer the gift amount directly to your sister's bank account and ask her to start an SIP herself — this is the cleanest, legally compliant method.. Check if your sister's KYC is complete by visiting the CAMS or KFintech website; if not, help her complete Aadhaar-based e-KYC online in under 10 minutes.. Advise your sister to note the SIP start date and fund type, since equity fund LTCG above ₹1.25 lakh per year is taxable at 12.5% when she eventually redeems..

Pro tip: If your sister is a minor, a parent or guardian must open a minor folio — the SIP automatically converts to a regular adult account when she turns 18.