Gift tax applicability when a new car received against old c

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

17 February 2014 gift tax applicability when a new car received against old car which was met with road accident while driving – currently my car is met with accident with other car . other car owner has admitted his careless and negligence. My car is insured. Other car owner has given a new branded car from indian dealer . New car's cost is more than the car's WDV. I took the insurance from the company and give this amount to the car owner. My queries is that is this transaction attract the gift tax ? Is income tax caluse applicable?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

17 February 2014 1. Gift tax has been abolished. Therefore there is no tax on such gift.

2. Gift of PROPERTY from non-relatives are taxable u/s Section 56(2)(vii).

However, PROPERTY does NOT include car. Accordingly, there is NO tax liability on the car received.

Querist : Anonymous

Querist : Anonymous (Querist)

20 February 2014 will u elobrate more on "property" ? is dedination given in income tax?

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)

21 February 2014 Property has been defined in Section 56(2) as under:

"property" means the following capital asset of the assessee, namely:—

(i) immovable property being land or building or both;

(ii) shares and securities;

(iii) jewellery;

(iv) archaeological collections;

(v) drawings;

(vi) paintings;

(vii) sculptures;

(viii) any work of art;

(ix) bullion

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