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Captial gain on car

Hardik Patel (B.Com, CA Final) (158 Points)

17 May 2017

Hello Sir,

I purchased a car on 01/10/2014 for Rs. 650000/-. Since then i am claiming depreciation on that. Now i am planning to sold it in next month for Rs. 500000/-.

So my question is what is the tax implication? Is there any exemption available if i purchase another car from the said sale proceed?

Please help in this regards.

Thanking you.

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14 Replies

sowmya (audit assistant) (228 Points)
Replied 17 May 2017

sir can you plz specify the taxable person. I mean whether you are a individual as an assessee or a firm

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Hardik Patel (B.Com, CA Final) (158 Points)
Replied 17 May 2017

He is Individual

sowmya (audit assistant) (228 Points)
Replied 17 May 2017

sir in case after the sale when no other assets are left in the block of asset then the gain arising from the same shall be considered as short term capital gain/ loss as the case may be

Hardik Patel (B.Com, CA Final) (158 Points)
Replied 17 May 2017

Thanks. But is there any exemption available if i invest sale proceed in purchase of new car?

Arikeri Venkataraju (31 Points)
Replied 17 May 2017

Thanks sir

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RAJEEV (CA Articleship) (87 Points)
Replied 17 May 2017

Firstly, record the purchase of car in your books and then record the sale of old car so that the block won't be empty. Correct me if I am wrong.

1 Like

Gnana prakash (article assitant) (28 Points)
Replied 17 May 2017

Format is
Opening WDV Add Purchases During the year less Disposal during the year
If Balance is Positive Charge Depreciation on it
if Negative Capital Gain

1 Like

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 May 2017

You have to pay tax on 45000/- under head capital gain

CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 May 2017

if u purchase new car more than value Rs.45000/- then no tax charged on it

garimella bharadwaj (2 Points)
Replied 17 May 2017

personal effects of movable Nature,not included in capital asset.

if my explanation is wrong,plz tell me.

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CA Rashmi Gandhi (Chartered Accountant) (86323 Points)
Replied 17 May 2017

he us claiming dep it refers that it is business asset

CA Suraj Lakhotia (IndigoLearn) (4898 Points)
Replied 17 May 2017

If you do not have any other asset in the 15% (Machinery) category and if you do not buy a new car, you will have to pay short term capital gains. If you buy a new car, the block would not be zero. You will add the value of new car to the existing block and reduce the value of sale proceeds and continue to claim depreciation. No capital gain or loss if the block is not zero or if there is atleast one asset in the block.