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Other sources doubt

01 March 2023

I have a personal car that costs 8 lakh . I know capital gain will not be applicable on that . suppose I sold it for 10lakh will 2 lakh be taxable in the head income from other sources .

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6 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178071 Points)
Replied 01 March 2023

Yes, it will be taxable u/h. IFOS.

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Abinash Panda (80 Points)
Replied 01 March 2023

Thank you sir

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178071 Points)
Replied 01 March 2023

You are welcome.

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CA Raj Doshi (Practising CA) (8924 Points)
Replied 02 March 2023

I would like to differ. Motor car used for personal purposes is a personal effect excluded specifically for taxation. So the difference of 2 lakhs being profit on sale of personal effect won't be taxed at all and is outside the ambit of income tax

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Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (178071 Points)
Replied 02 March 2023

Though it is disputable issue...

Let me quote the argument of ITO in such case.. Case was opened based on TCS not claimed...

1. No personal assts are sold at profits specifically a Car.

2. Car is personal asset and is out of tax ambit when an assessee receives it as gift, but when the same is sold at profits over and above the original cost paid by donor, tax liability arises over the difference.

3. Can you provide any case law in favor of your claim?

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Eswar Reddy S (CFO- at NHTF) (58270 Points)
Replied 03 March 2023

I think personal assets might not be capital assets and can not apply capital gain provisions.

But it is taxable under the head income from other sources as said by above members