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Head of income is taxable

susanta kumar jena (CA Final/ICWA Final) (50 Points)

16 April 2011

when suppose indivisual purchase car used for personal purpose .After some time it's sale.In this in which head of is taxable.

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5 Replies

Ratan Deep Saxena (Asstt Manager (Accounts & Finance)) (2998 Points)
Replied 16 April 2011

Income from Other source......

regards,

ratan

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suneet (CA FINAL) (421 Points)
Replied 16 April 2011

income from other sources

Chandan kumar (B.Com. (H) & CA FINAL and intrested to learn new thing) (263 Points)
Replied 19 April 2011

This is not chargable to any where because this is a capital nature unless income from capital gain

inconme and as per sec 2(14) of income tax act 1956 any presonal property held for personal use is not treated as capital assets.

so sale of car is not taxed in the hand of the assessee.

Vignesh Killur (Articled Assistant) (1671 Points)
Replied 19 April 2011

In my humble opinion a car held for personal purpose, if sold, attracts Capital Gains. If it were used for business it would be a depreciable asset and would not attract Capital Gains and Sale Value would have to be reduced from the WDV of the Block of assets. But in this case as it is not a depreciable asset, it would attract Capital gains. But it being a car its resale value would generally be lesser than its purchase price and hence in most cases would be a capital loss. STCL can only be set off against LTCG & STCG. LTCL can only be set off against LTCG. Sale of personal assets do attract Capital gains like sale of residential property, Jewellery, shares etc.

U S Sharma (glidor@gmail.com) (21063 Points)
Replied 19 April 2011

car is personal effect rathar than capital goods, as car is depriciable asset, like mobile phones, electonic gadgets, tv washing machine etc.

no stcl/ltcl/loss adjustment benefit available on car, only if u get some extra money ( premium ) on sale of car then its to be taxed as income from other sources, losses are capital loss, nowhere adjustable.