I have a partnership firm with my spouse.
Can we show buying a car as a 'business expense' instead of as an 'asset' and straight away debit the purchase price from the business profits to save tax?
Please enlighten me and suggest the best approach.
3 Replies
Eswar Reddy S
(CFO- at NHTF)
(58270 Points)
Replied 23 September 2023
No. You can't show it as expense. But you can claim only depreciation.
If your business is into buying and selling of cars then you may treat it as exp ( stock)
If your business is into buying and selling of cars then you may treat it as exp ( stock)
prasad Nilugal
( GST Practitioner & Accounts )
(14801 Points)
Replied 23 September 2023
No , You Can not show Car as business expenses, you have to show it as Capital Asset, because Capital Asset is define under section 2(14) of the income tax Act 1961 , wherein vehicle is treated as Capital Asset. So your Car as expenses is disallowed and you have to pay tax .
If you are buying and selling of Car then only you can show it as purchase, because as per section 2(14) C(I) of the income tax Act, stock in trade is not Capital Asset.
Please refer section 2(14) of the Income tax act .
sabyasachi mukherjee
(27574 Points)
Replied 24 September 2023
If used for the purpose of business then it's ok
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