Go AD-Free with CAclubindia Pro and Daily Mobile Updates. Subscribe Now!

Sale of personal car

Dipjyoti Majumdar (CA in service & CS. dipmaj@ ) (3469 Points)

26 March 2014

Friends,

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,

Reply
Follow
Share

5 Replies

Manoj Mehta (Head Of Department (Accounts & Finance)) (1479 Points)
Replied 26 March 2014

No capial gain will come in this case as "personal effects" that is to say, movable property. Please refer to definition of capital assets section 2(14). Regards

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,