Motor claim insurance received

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vipin

vipin (Querist)
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28 July 2012 in which section it is taxable if excess wdv?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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28 July 2012 It can be treated Income other sources

CA Hardik Bunha

CA Hardik Bunha (Expert)
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28 July 2012 It will be incorrect to state this gain as income from other source.

this gain will be treated as capital gain.
this gain will be short term capital gain u/s 45(1A) read with section 50.

Mohit Naithani

Mohit Naithani (Expert)
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28 July 2012 Motor car is an asset of Personal Effect (If not use in Business & Proff). Hence any insurance claim recv agt damage, destruction of such property is not taxable under any head of Income.

In case of any other assets Sec 45(1A) is applicable if the following condition are satisfied :
1. Compensation recv due to damage and destruction of an assets

2. Damage or destruction is due to (i) Nature, (ii) Riot etc (iii) Enemy Action and (iv) accidental fire explosion.

Neha Desai

Neha Desai (Expert)
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28 July 2012 If motor car is a business asset ( depreciable asset )then excess claim received shall be "Short term capital gain".

Kind regards,
Neha D.

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