Sachin sells Ferrari - is it a capital asset?

Page no : 4

Max Payne (employed) (2574 Points)
Replied 30 June 2011

Originally posted by : Karan Batra
	Car being a personal asset does not come in the purview of Capital Asset And for all those who are saying that it wld be taxable as he may have been using it for business and wld hv been claiming depriciation on the same, can u please explain why would sachin be using it for his business as his Cost of Acquisition is Nil and he cannot claim depreciation on the same... please correct me if I'm wrong

Dear Karan,

Good question only.

If he has used it as a business asset,

The cost for the purpose of claiming depreciation,

is the cost to the previous owner. [Expl 2 to Sec 43(1)]

For computing capital gains (only if not personal effect, and the asset is eligible for depreciation), it will be WDV as per the IT Act. [sec 50A]

Mukesh, car is not excluded from the purview of personal effect.

The onus will be on the assessee to prove that it is a personal effect.

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(Guest)

it is not a capital asset and therefore no capital gain tax

Ashish Bansal (Commercial Manager) (240 Points)
Replied 01 July 2011

First of all, i want u all to know that the Import duty was not exempted, at last after the harsh replies from social activists and opposition, the Fiat co. had bear the duty of around Rs. 1.20 Cr..

Regarding Capital Gain Tax I think it will be a personal asset not liable to tax.