07 June 2017
one of my client has purchased a car on april at Rs.5lakhs and sold in dec 16 at Rs.4.5lakhs....what is the taxabilty and should we claim depreciation....
07 June 2017
Under income tax depriciation can be claimed only for those assets which are existing in block or otherwise as on 31st march of relevant previous year, since in your case car was sold on dec 16 so accordingly depriciation of same cannot be claimed
and
Loss of Rs. 50000 (5lakhs -4.5 lakhs) is short term capital loss which can be setoff only from other capital gains whether long term or short term, if given loss cannot be setoff in current year same can be carry forward till 8 years which can be adjusted against in future against capital gains.
08 June 2017
It is treated as business loss if your client is having business of dealing in cars and cars forms part of his stock in trade otherwise same is to be covered under capital gains
Let us understand this with an example, for an automobile showroom profit/loss in dealing of automobile form part of business because such automobiles are part of their stock in trade, but if an employee of such showroom sold his car then profit/loss on such transaction is covered under capital gains because that employee is not engaged in business of dealing in cars
08 June 2017
if he is engaged in business of providing car on rental then cars/vehicle is part of his business and profit/loss on sale of vehicle is treated as business loss and NOT capital loss
CAclubindia
