It addresses a current issue where the transfer of securities to a legal heir, after a nominee has received them, may be incorrectly treated as a taxable event for the nominee, despite the Income Tax Act not considering it a ‘transfer’. The nominee’s role is that of a trustee, holding the assets for the legal heirs. It proposes introducing a new, standardized reason code, ‘TLH’ (Transmission to Legal Heirs), for use by reporting entities. This code will be used when reporting these transactions to CBDT, ensuring the correct application of income tax laws and preventing the nominee from being inappropriately taxed on capital gains. The comments/ feedback from stakeholders are invited.