capital gain/loss

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girish (Querist)

17 February 2011 when LMV TAXI sold, is there any capital gain/loss involved. if so how it is calculated? purchased on 16th Dec 2007 for Rs3,40,000/-(basic price of car excluding reg fee, insurance, and road tax)and sold on 17th Feb 2011 for Rs1,20,000/-

CA. Lohith Jagadeesh

CA. Lohith Jagadeesh (Expert)

18 February 2011 Hi,
Will get back to you with complete info,

Regards
CA. LOHITH.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons

girish

girish (Querist)

21 February 2011 when LMV TAXI sold, is there any capital gain/loss involved. if so how it is calculated? purchased on 16th Dec 2007 for Rs3,40,000/-(basic price of car excluding reg fee, insurance, and road tax)and sold on 17th Feb 2011 for Rs1,20,000/-

Aashok Kumar Sharma

Aashok Kumar Sharma

(Expert)

18 July 2024 Yes, there will be a capital loss involved when you sell a LMV taxi at a lower price than its purchase cost. Let's calculate the capital loss step by step:

### Calculation of Capital Loss:

1. **Cost of Acquisition**: This is the initial purchase cost of the LMV taxi.

- Purchase date: 16th December 2007
- Purchase price: Rs. 3,40,000 (excluding registration fee, insurance, and road tax)

2. **Sale Consideration**: This is the amount received from selling the LMV taxi.

- Sale date: 17th February 2011
- Sale price: Rs. 1,20,000

3. **Capital Loss Calculation**:

Capital Loss = Cost of Acquisition - Sale Consideration

Capital Loss = Rs. 3,40,000 - Rs. 1,20,000

Capital Loss = Rs. 2,20,000

### Understanding Capital Loss:

- Since the sale consideration (Rs. 1,20,000) is less than the cost of acquisition (Rs. 3,40,000), you have incurred a capital loss of Rs. 2,20,000 on the sale of the LMV taxi.

### Tax Treatment:

- **Capital Loss Adjustment**: You can adjust this capital loss against any other capital gains you may have in the same financial year or carry forward the loss to future years.

- **Income Tax Return**: Report the capital loss in your income tax return under the head of 'Capital Gains'.

- **Documentation**: Maintain records of the purchase and sale transactions, including invoices, receipts, and any other relevant documents.

### Conclusion:

In summary, selling the LMV taxi at a lower price than its purchase cost results in a capital loss of Rs. 2,20,000. This loss can be utilized to offset other capital gains, thereby reducing your overall tax liability. Ensure you comply with tax reporting requirements and consult with a tax advisor for personalized advice based on your specific financial situation.

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