Deduction of car loan principle amt and interest

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Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2016 Dear All
We have purchased the car in the name of firm, query....1) can we caim depreciation on this car....2) can we claim the deduction of interest paid on this car....3) weather principle amount's deduction can be claimed or not,

Thanks & Regards
Ravindra Thakur

CA. Vinodh Kothari

CA. Vinodh Kothari (Expert)

24 November 2016 If the car is used for business purpose then you can claim depreciation and claim deduction of interest paid on car.

Principle amount repaid for car loan cannot be claimed as deduction.

VK

Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2016 Sir Thanx for your valuable guidance...
However the car shall be used partly for business and partly for personal purpose now the question is how AO will examine the fact weather the said car is being used for personal purpose also... or not,

Pls guide.....

CA. Vinodh Kothari

CA. Vinodh Kothari (Expert)

24 November 2016 if the car is partly used for partly for personal and partly for business you can add certain percentage say 15% of total car Interest, Depreciation, Petrol and Repair expenses to your income in the tax computation sheet.

VK

Querist : Anonymous

Querist : Anonymous (Querist)

24 November 2016 Sir did you mean first claim the deduction of depreciation and interest & petrol expenses actual incurred toward the car and later while computation of Income tax we can ADD 15% income in computation sheet if yes then question arries in which head this 15% income shall be treat?

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