Capital gain tax on sale of personal car

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vipin Jain (Querist)

07 April 2015 I have sold a personal car which was received from my parents . This car will be taxed as capital gain or not. If taxed then whether short term or long term and what will be the cost of acquisition.

Aditya Maheshwari

Aditya Maheshwari (Expert)

07 April 2015 In case it is gift received from parents the cost of acquisition would be the cost of acquisition of the previous owner. Hence there would not be any capital gains in that case.

vipin Jain

vipin Jain (Querist)

07 April 2015 A personally used car is sold if profit it will be tax as capital gain or not. If tax than will be STCG or Long..?

Car was acquired from parents

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Nikhil Kaushik

Nikhil Kaushik (Expert)

07 April 2015 the reason for no capital gains here is that car is counted a personal effect of a person and hence not considered as a capital asset. whether it is gifted or not, shall have no impact.

Aditya Maheshwari

Aditya Maheshwari (Expert)

07 April 2015 My earlier reply stands corrected. Car used for personal purpose will be personal effect and not treated as capital asset as per definition in section 2 (14). Therefore, the profit on its sale or transfer will not be subjected to income tax. However, no depreciation is admissible on personal effects.

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