07 April 2015
I have sold a personal car which was received from my parents . This car will be taxed as capital gain or not. If taxed then whether short term or long term and what will be the cost of acquisition.
07 April 2015
In case it is gift received from parents the cost of acquisition would be the cost of acquisition of the previous owner. Hence there would not be any capital gains in that case.
07 April 2015
the reason for no capital gains here is that car is counted a personal effect of a person and hence not considered as a capital asset. whether it is gifted or not, shall have no impact.
07 April 2015
My earlier reply stands corrected. Car used for personal purpose will be personal effect and not treated as capital asset as per definition in section 2 (14). Therefore, the profit on its sale or transfer will not be subjected to income tax. However, no depreciation is admissible on personal effects.
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