Second Hand Car

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Amit Garg (Querist)
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16 April 2011 I am a salaried person. I have purchase a second hand car (December, 2004 model) for Rs 152000/- in the m/o October'2010. Now plz confirm can I show depreciation on it, if yes on what basis? If not, then where the amount of Rs 152000/-will go and suppose I sold it in December'2013 for Rs 1 Lac in cash then what will accounting entry? Plz confirm me at my mail id amitkumargarg@tridentindia.com

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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16 April 2011 Depreciation is allowed while calculating income from business on those assets which are put into use for the purpose of business. As a corollary, a salaried person can't claim depreciation on his/her personal asset. Like wise profit/ loss on the sale of car used for personal use will not be counted for tax claculation.

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Amit Garg

Amit Garg (Querist)
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18 April 2011 Dear Sir

Thanks for your reply. But I want to know that Is purchasing a second hand car with cheque & selling the same in cash allowed. I sold my car in Rs. 1 Lac cash. Can I show the cash entry in my books and where the balance loss amount of Rs. 52000/- will go?