Depreciation

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whether depreciation on second hand car is allowable as per income tax
Replies (5)

Yes, you can claim

Yes you can claim .. dont get confused with the additional depreciation on P&M purchased for the purpose of production and manufacturing . We cannot claim ADDITIONAL deprecation on 2ndhand manufacturing P&M
How the amount of vehicle has to be recognise if it is a gift
Rate of depreciation also???

i hope the following rates may be helpful to you.

 My question is whether that car is gifted from your relative or friend or employer?. whether you use it for business purpose or personal purpose?.

if it is received from your relative means it is not at all taxable even the amount exceeds 50000 u/s 56 of the income tax act if it covers under relative definition mentioned in section 56.

if such amount received as inheritance or by way of will the total amount is exempted from gift tax.

in such case if car actual f.m.v is 100000. but if you received it for 80000. which exceeds the limit of 50000, then the amount of 20000 is taxable in your hands under income from other sources

if the gift payer given car to you with out any consideration in back from you, the gift payer is liable to pay gift tax.

the problem in the section 56 is that it does not covers car in the definition of movable property.

yet i want to give you clarity about what is the cost of asset in order to claim depreciation and the rates are same as first hands car.

 i will reply as soon as possible in my next comment.

 

thanking you,

manikantaswamy.prabhas @ gmail.com

 

Car Ageing Depreciation Slabs
First 6 mo 15%
6mo - 1 yr 20%-25%
1yr - 2 yr 25 - 30%
2yr - 3 yr 30% - 35%
3yr - 4 yr 35% - 40%
In 5th year 50% - car value almost half
5th - 7th yr 50% - 65%
7th - 10 yr 65% - 80%
11th - 14 th yr 80% - 90%
15yr and above 90% or 


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