Shushan Purim on Shabbat
When Shushan Purim, observed in walled cities in Israel, coincides with Shabbat, the holiday is actually spread out over three days as follows*:
Adar 14: Megillah reading and Matanot L’evyonim (gifts to the poor)
Adar 15: Exodus 17:8-16 is read as part of the Shabbat Torah reading and Al Hanissim is added to davening and bentching.
Adar 16: The festive meal is eaten and Mishloach Manot (gift baskets) are sent. Al Hanissim is not added to davening or bentching, as it is Technically, no longer Purim.
The Megillah is not read on Shabbat lest one carry it outside of reshuth harabim (public area not enclosed by an eruv). However, a verse in the Megillah (Esther 9:27) states that these days “shall not pass,” and therefore we read the Megillah on Friday and not Sunday.
On Shabbat, the exchange of money is prohibited, therefore Matanot L’evyonim is performed the day before so that the poor might benefit as early as possible.
The festive meal is postponed until Sunday so that one celebrates the Shabbat meal separately from the Purim meal.
Mishloach Manot are delayed because one cannot exchange gifts on Shabbat. Why: Changing ownership is considered akin to performing a business transaction, which is prohibited on Shabbat.