Dipjyoti Majumdar (CA in service & CS. dipmaj@ ) (3469 Points)
26 March 2014Friends,
A salaried assessee purchased a car for personal use 6 years back at 4 lakhs. He sold the car at 1 lakh this month. How to compute loss/profit on sale. Will there be indexation benefit given. Will depreciation be allowed. Note this is not for business use.
Regards,
Manoj Mehta
(Head Of Department (Accounts & Finance))
(1479 Points)
Replied 26 March 2014
DINU SUKUMAR
(Audit Manager)
(176 Points)
Replied 26 March 2014
Dear Dipjyoti,
Under section 2(14) of the income tax act says that personal assets of movable nature does not coming in the purview of capital asset.Hence there is no capital gain arises on sale of motor car and hence no taxability.
Dipjyoti Majumdar
(CA in service & CS. dipmaj@ )
(3469 Points)
Replied 27 March 2014
Thank you for your observations.
So, there is no capital gain as it is not a capital asset. But can there be a stand that it is income from other sources if there is a profit on sale of an asset and liable to be taxed.
Regards,
DINU SUKUMAR
(Audit Manager)
(176 Points)
Replied 27 March 2014
Hi,
Profit or loss arises only in the case you are engaged in business/ profession. Here it is not applicable.
CA SUKSHAM ARORA
(CA)
(569 Points)
Replied 27 March 2014
GAIN ON SALE OF PERSONAL ASSETS ARE NOT TAXABLE U/H CAPITAL GAIN AS THEY DO NOT FORM THE PART OF CAPITAL ASSET
CAclubindia
