can i claim deduction if I purchase car for my office use from ltcg.
thank you
Maninder Singh (17 Points)
07 September 2022
sabyasachi mukherjee
(27119 Points)
Replied 07 September 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 07 September 2022
Purchase of Car is not eligible for any exemption against LTCG....
Goutham Babu P V
(44 Points)
Replied 07 September 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 08 September 2022
Yes, it will be reversed as Short term capital gain in the AY 2023-24.
For your perusal read ITD tutorial "16. exemption under 54" .... page 6 onwards... (Unable to attach the file here)..
Some extract follows....
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 08 September 2022
Consequences if the new house is transferred
Exemption under section 54 is available in respect of rollover of capital gains arising on transfer of residential house into another residential house. However, to keep a check on misutilisation of this benefit, a restriction is inserted in section 54. The restriction is in the form of prohibition of sale of the new house.
If a taxpayer purchases/constructs a house and claims exemption under section 54 and then transfers the new house within a period of 3 years from the date of its acquisition/completion of construction, then the benefit granted under section 54 will be withdrawn. The ultimate impact of the restriction is as follows:
The restriction will be attracted, if after claiming exemption under section 54, the new house is sold before a period of 3 years from the date of its purchase/completion of construction.
If the new house is sold before a period of 3 years from the date of its purchase/completion of construction, then at the time of computation of capital gain arising on transfer of the new house, the amount of capital gain claimed as exempt under section 54 will be deducted from the cost of acquisition of the new house.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 08 September 2022
Though some intellectual professionals treated that being GIFT, the transfer price being zero, so STCG is nil and tried to escape the STCG; but there is a catch now.
As of now, ITD treats transfer price as higher of sell price or STAMP DUTY value !!!
Goutham Babu P V
(44 Points)
Replied 08 September 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 08 September 2022
No need to dig deeper..... In short, the LTCG claimed in purchase of new HP will get reversed in AY 2023-24, when the house is gifted to wife within 1 month of purchase..
Goutham Babu P V
(44 Points)
Replied 08 September 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 08 September 2022
Though it is disputable, but sec. 47(iii) works with sec. 45 for calculation of capital gain over GIFT.
Here sec. 54 overrides it and Transfer as per sec. 2(47)(ii) would be considered for any reversal of exemption claimed earlier.
Need to search for any case law favoring assessee in such case.
Goutham Babu P V
(44 Points)
Replied 08 September 2022
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(167415 Points)
Replied 08 September 2022
The same thing I tried to explain earlier but you didn't...........
In general sec 54 do not override except in particular case, when the specific condition was laid down when the exemption claimed.
For computation of capital gain over Gift sec. 47(III) suggest exemption, so it it never taxed.
For case laws in your favor you may google it...
Goutham Babu P V
(44 Points)
Replied 08 September 2022
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