Rajiv (Senior Accounts Officer) (1548 Points)
17 August 2017SIR,
ONE OF MY CLIENT SALE HIS OLD CAR IN 7 LAKH. SIR IT IS NOT CAPITAL GAIN. PLEASE REPLY MT FOLLOWING QUERY
1-THEN SIR WILL HE SHOW THIS AMOUNT IN HIS RETURN.
2-WILL HE GIVE TAX ON IT AS PER SLAB RATE
3 - WHICH RETURN HE WILL FILL.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(183108 Points)
Replied 17 August 2017
1. Was any depreciation charged over car in earlier years?
2. What was the purchase cost and WDV as in the books of accounts? Whether there was any gain due to sell?
Rajiv
(Senior Accounts Officer)
(1548 Points)
Replied 17 August 2017
sir he is normal person. why he will make books of accounts.
V.Raghunadh
(Practicing Advocate and Corporate Consultant)
(202 Points)
Replied 17 August 2017
Ompal Singh
(Student CA Final)
(53 Points)
Replied 17 August 2017
as per sec 2(14) of income tax act personal belongings are not covered under definition of capital asset and hence no LTCG is determined , however profit , if any on sale of such car will be taxed under head other sources .
However there is no or less chance for any kind of gain in sale of old car .
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(183108 Points)
Replied 17 August 2017
So, no need to show this amount in ITR,
There won't be tax over sell proceeds.
ITR would be chosen as per his income heads..... the sell of car will not have any effect over it.
Rajiv
(Senior Accounts Officer)
(1548 Points)
Replied 17 August 2017
MEANS HE WILL IN INCOME FROM OTHER SOURCES
Rajiv
(Senior Accounts Officer)
(1548 Points)
Replied 17 August 2017
BUT SIR WHEN ANY TIME INCOME TAX DEPT. WILL SENT ANY NOTICE AFTER SEEING 7 LAKH AMOUNT IN BANK. THEN HE WILL NOT ASK THAT PERSON. WHY HE NOT SHOWED THIS AMOUNT IN ITR.
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(183108 Points)
Replied 17 August 2017
This amount is not his income or gain. It is the sell proceeds of the car (a personal asset) which he would have purchased earlier.
So he can justify the credits to his bank account by sell documents of the car alongwith original purchased documents.
RAMESH
(PROPRIETOR)
(22 Points)
Replied 15 July 2018
SIR I SALE OLD CAR IT IS CAPITAL GAIN I SHOW THE CAR IN BALANCE SHEET
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(183108 Points)
Replied 15 July 2018
If its business asset........ tax liability will arise (provided block of assets ceases to nil).
But if its your personal asset (be it in your personal BS), no capital gains......
Nidhi Agrawal
(Job )
(66 Points)
Replied 24 August 2018
I would like to add more to the query. What if Car is sold for 11lacs and the person has done TCS on same u/s 206CL. Still we can show such income from other sources?
Dhirajlal Rambhia
(SEO Sai Gr. Hosp.)
(183108 Points)
Replied 24 August 2018
Is there any gain? As the cars are not likely to be sold more than purchased value!!!
CAclubindia
