Gift tax applicability when a new car received against old c

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2014 gift tax applicability when a new car received against old car which was met with road accident while driving – currently my car is met with accident with other car . other car owner has admitted his careless and negligence. My car is insured. Other car owner has given a new branded car from indian dealer . New car's cost is more than the car's WDV. I took the insurance from the company and give this amount to the car owner. My queries is that is this transaction attract the gift tax ? Is income tax caluse applicable?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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17 February 2014 1. Gift tax has been abolished. Therefore there is no tax on such gift.

2. Gift of PROPERTY from non-relatives are taxable u/s Section 56(2)(vii).

However, PROPERTY does NOT include car. Accordingly, there is NO tax liability on the car received.

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2014 will u elobrate more on "property" ? is dedination given in income tax?

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CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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21 February 2014 Property has been defined in Section 56(2) as under:

"property" means the following capital asset of the assessee, namely:—

(i) immovable property being land or building or both;

(ii) shares and securities;

(iii) jewellery;

(iv) archaeological collections;

(v) drawings;

(vi) paintings;

(vii) sculptures;

(viii) any work of art;

(ix) bullion