Raksha Bandhan 2026: How To Gift An SIP To Your Sister? KYC, Tax Rules Explained

Raksha Bandhan is a traditional time to celebrate the bond between siblings. This year, investors are looking for a modern way to show their support by gifting a Systematic Investment Plan (SIP) to their sister. A SIP allows for small, regular investments in mutual funds, which can help build wealth over time. Instead of a physical gift, you can help your sibling start or increase their investment habit.

To gift an SIP, you must first ensure the recipient has completed their KYC (Know Your Customer) process. This involves verifying their identity and address with the mutual fund house. You can transfer funds directly to the sister's bank account, which she can then use to invest in her preferred fund. This approach simplifies the process and ensures the investment is managed by the person who will benefit from it.

For tax purposes, the money transferred is considered a gift. If the amount exceeds ₹50,000 in a financial year, it may be added to the recipient's income and taxed accordingly. However, gifts from close relatives, including siblings, are generally exempt from tax under current rules. Always check the specific terms of the mutual fund and the latest tax regulations before making any transfer.