capital gain/loss
This query is : Resolved
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/-
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
Will get back to you with complete info,
Regards
CA. LOHITH.J
B.Com,ACA,CS,(ICWA),SAPM Hons,ITF Hons
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/-
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.
### 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.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Unregistered suppliers utility
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- Difference between Date of Payment and Date of Deduction?
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- TDS AND ITR ISSUE
- Same demand raised for original as well as rectification request return
- Sale of property held jointly with a non resident Indian
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- ITR 4 and Bank transactions
- The TDS balance for March 26 shows a mismatch between the books and the portal; what should be done
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
