Parents can now easily gift mutual fund units to their children through an online process, avoiding immediate capital gains tax. This 'off-market' transfer, facilitated by brokers or RTAs like CAMS and KFintech, requires OTP verification and a small stamp duty. While gifts to children are tax-exempt under income tax laws, any income or gains from these gifted units will be clubbed with the parent's income if the child is a minor. For adult children, gains are taxed in their own hands.