capital gain

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Sejal Lalit Jain (Querist)
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13 July 2011 Any claim received under the car insurance policy needs to be reduced with cost while calculating capital gain if car is sold in the year of claim received ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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13 July 2011 It depends. If the claim is received in respect of normal repairs, and the expenditure has been debited to P&L A/c,
then you should credit the receipt to P&L.
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If the claim is due to an accident and the cost of major repairs have been debited to
car a/c , then you have to credit the receipts to car a/c.
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In case Car is Sold after accident without any repairs, then the insurance claim amount will be deducted from the WDV of Car.

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