movable assets transferred by way of gift or as free of cost
This query is : Resolved
Meeta Jain
(Querist)
27 December 2010
Hi,
My company wants to transfer Plant & machinary free of cost or as a gift to a person. Whether it can do so?
What would be tax implications of this transactions?
What journal entries i need to pass in my books?
In my views :
It will not be treated as transfer u/s 47; therefore no capital gains attracts to my company.
u/s 49, the cost of acquisition of the asset shall be deemed to the cost for which previous owner of the property acquired it.
Hence, for receiver of the gift,COA is cost of previous owner.
My company wants to transfer Plant & machinary free of cost or as a gift to a person. Whether it can do so?
What would be tax implications of this transactions?
What journal entries i need to pass in my books?
In my views :
It will not be treated as transfer u/s 47; therefore no capital gains attracts to my company.
u/s 49, the cost of acquisition of the asset shall be deemed to the cost for which previous owner of the property acquired it.
Hence, for receiver of the gift,COA is cost of previous owner.
CA ASHISH GUPTA
(Expert)
27 December 2010
Section 56 (vii) (c) applies to only specified movable property i.e. share, jewellery, paintings etc., so if your company wants to transfer other movable assets, no tax in the hands of donee.
However it is not the general practice by the company to gift anything to anyone otherthen employees.
However it is not the general practice by the company to gift anything to anyone otherthen employees.
28 December 2010
It will be taxed as perquisites in the hands of donee. For valuation refer valuation rules.
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