Originally posted by : PRAMOD KUMAR
	Hi MOHIT Your question seems to be so relavnt with the latest developments. My opinion is that Sports Car cannot be a personal asset and hence liable to capital gains tax. As the car was gifted to Sachin, no question of indexation arise, as the aquisition cost is a BIG ZEROOOOO, Also from the ethical point of view, it seems so unfair on part of a Sportperson of Sachin's standard to have sold the car. He could also have gifted the same to BCCI. I am sure Sachin earns enough so as not to be dependent for his daily survival on the consideration receivable from car's sale. JAISI JISKI SOCH, Uska Ram Dharam Woh hi Jaane. PRAMOD

Sir,

can u please elaborate on your opinion about "personal effects".....

Capital Asset means ,

Any property moveable/immoveable/ tangible/intangible

Except:

1. Stock, spares, raw material used for business / profession.

2. Personal effects  i.e. moveable property used for personal use.

    However, personal effects don't include jewellery.

Hence, if sachin used his ferrari for professional purpose and obviously claimed depreciation on it, then he would be taxed for the capital gains arising on sale of this car.

Else, if he used his car exclusively for personal use then it is not a capital asset for taxation.

(the source of car i.e. as gift or purchase of car does not have any effect on the above case)

The crux is in whether the car was used for wholly personal purposes.

If it was used or personal purposes, it would be a personal effect, and hence not be treated as a capital asset.

If maintenance expenses or depreciation has been claimed,

it will definitely not be a personal asset.

You may refer

https://www.rediff.com/money/2004/apr/30tax1.htm

Sachin Tendulkar is a Professional Cricketer playing on a contract basis signed by him with BCCI, now in

performing his Professional commitment sachin has not used Ferrari in this way it is a Personal Effect and movable "as per section 2(47) Capital gains are exempt".

NO CAPITAL GAIN ARISE BACAUSE AS PER CPAITAL ASSETS DEFINITION THAT MOVABLE ASSETS NOT COVERED UNDER THAT DEFINITON . Pl read sec 2(49)
 

scenerio 1- sachin tendulkar as sportsperson

ferrari is not a capital asset, hence no capital gain 

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scenerio 2 - sachin is an artist, and have claimed u/s 80RR in 2002-03 reports

https://sports.in.msn.com/cricket/sachincorner/article.aspx?cp-documentid=5164776

here being an artist, he can have the car as "professional capital asset" to perform his art, 

under this scenerio he is eligible to claim capital gain, 

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Now the question of pricing of capital asset acquisition..................

car as gifted and was zero priced in customs - customs duty also weived 

BUT

gift tax can not be avoided in such case, and whatsoever the value was adopted by CIT, gift tax must had been paid by Sachin, plus other incidental viz traportation/ insurance/ sea freight/ customs clearance ( except customs duty , port charges , and other local taxes were applicable,) which all had to be capitalized in fixed assets)

As i am not a professional CA to discuss the fine readings between the rules/acts., but i belive that he has used his "artist" catagory to utilze the car as "capital asset" and hence it would amount himself as capital gain.

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Amount of sales consideration is still in dark, wait for more clear news on this front.

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Disclaimer : Its purely my personal views, may go wrong, but i belive that tax planning is banafide right of every citezen of india.

thank u mam and sir

Thank u so much sir.....

Thank you so much guys for replying :)

So it is clear that it is not a Capital Asset.... So Sachin need not pay Capital Gains Tax...

Aaala re Aala :)

Hi, everyone my views are,

1) Mode of acquisition payin money or gift is irrelevant while considering the chargeability of asset.

2) It would be definately be argued as used for personal purpose, tax planning applies to sachin too, hence it is capital asset of personal nature so no capital gains would be attracted.

Originally posted by : Mohit Jain
	Thank you so much guys for replying :) So it is clear that it is not a Capital Asset.... So Sachin need not pay Capital Gains Tax... Aaala re Aala :)

dont rejoice so early ................................

Gift tax paid means the same is his own capital by paying gift tax, hence it is his own property now, so question of capital gain or any gain does not arise but its a pure loss coz the value must be less then the book value taken for gift tax purpose.

Very interesting discussion on useful topic,

Thanks  mohit for raising the query  n US Sharma sir for detail clarification.

Capital asset has been defined u/s 2(14) and it doesn't include movable property. Hence it is not a capital asset under Income Tax Act, 1961. However it is a gift and will be taxable under Income from other sources u/s 56.

it is personal asset so no capital gain

BUT if he is using this car in his business and claiming depreciation then attracts capital gain. However, cost of acquisition shall be zero for the purpose of CG but actual owner's cost shall be used for claiming depreciation

it has personal effect so not a capita asset ....so no caiptal gain ....so no tax