Tds on personal assets
This query is : Resolved
04 September 2011
i am having a motor car,i have no business income and car is for personal use, i have to show it in my personal balance sheet,should i reduce the value of car by depreciation or not
if i supposed to charge depreciation
what about capital gain when i sells the car ?
if i supposed to charge depreciation
what about capital gain when i sells the car ?
04 September 2011
If you are an salary employee then you can't claim depreciation on motor car. If you running any profession/business activity then you can claim depreciation on your motor car.
05 September 2011
Agreed...
Depreciation is a business expenditure which can be claimed only in the business or profession.
Depreciation is a business expenditure which can be claimed only in the business or profession.
05 September 2011
if no depreciation is chargeable,then how to show the asset in personal bal sheet/ statement of affaris at cost value or at reduced value by depreciation,
will the value of the asset remain same till i possess the asset
will the value of the asset remain same till i possess the asset
05 September 2011
you can prepare the your personal balance sheet with the depreciation but Income tax the depreciation not allowed since no business income
08 September 2011
what if no depreciation is charged/reduced and sold at a higher price than the cost of purchase after 3 years,
how the capital gain calculated for depreciable assets in personal balance sheet when there is no businees income or business asset
how the capital gain calculated for depreciable assets in personal balance sheet when there is no businees income or business asset
27 July 2025
Great question! Here's how it generally works regarding **personal assets like a motor car used for personal purposes**:
---
### 1. **Depreciation on personal use asset**
* **If the asset (car) is NOT used for any business or profession (i.e., purely personal use), you cannot claim depreciation for Income Tax purposes.**
* However, **for your own personal balance sheet**, you *may* choose to show the asset either at **cost price** or **cost less some depreciation (for your internal tracking)** — this is your choice as it’s a personal record and not for tax purposes.
* Income Tax law does **NOT require** you to depreciate personal assets or adjust the balance sheet value for depreciation unless used in business.
---
### 2. **Capital Gains on sale of personal assets**
* Sale of **personal motor car** is considered a **transfer of a capital asset**.
* **Capital Gains Tax applicability:**
* If the car is a **movable asset**, capital gains tax **does NOT apply** as per Income Tax Act (since motor cars are considered movable assets and exempt from capital gains).
* **Exception:** If the car is used for business, then the sale proceeds may be subject to capital gains tax, considering depreciation claimed earlier.
* If you have *not* claimed depreciation (since it is personal use), then **capital gains calculation is generally not applicable on sale of personal motor car**.
---
### Summary:
| Aspect | Treatment |
| ---------------------------- | -------------------------------------------------------------------- |
| Depreciation claim (Tax) | Not allowed on personal use car |
| Personal balance sheet value | Cost price or cost less your chosen depreciation (not tax-impacting) |
| Capital gains on sale | No capital gains tax on sale of personal motor car (movable asset) |
---
### Important:
* If the motor car is used for **business or profession**, you can claim depreciation under Income Tax law and capital gains calculation would then apply on sale considering written down value.
* For **personal assets**, no depreciation claim and no capital gains tax on sale.
---
If you want, I can help you with examples or further explanation on how to maintain your personal balance sheet or calculate capital gains in different scenarios. Would you like that?
---
### 1. **Depreciation on personal use asset**
* **If the asset (car) is NOT used for any business or profession (i.e., purely personal use), you cannot claim depreciation for Income Tax purposes.**
* However, **for your own personal balance sheet**, you *may* choose to show the asset either at **cost price** or **cost less some depreciation (for your internal tracking)** — this is your choice as it’s a personal record and not for tax purposes.
* Income Tax law does **NOT require** you to depreciate personal assets or adjust the balance sheet value for depreciation unless used in business.
---
### 2. **Capital Gains on sale of personal assets**
* Sale of **personal motor car** is considered a **transfer of a capital asset**.
* **Capital Gains Tax applicability:**
* If the car is a **movable asset**, capital gains tax **does NOT apply** as per Income Tax Act (since motor cars are considered movable assets and exempt from capital gains).
* **Exception:** If the car is used for business, then the sale proceeds may be subject to capital gains tax, considering depreciation claimed earlier.
* If you have *not* claimed depreciation (since it is personal use), then **capital gains calculation is generally not applicable on sale of personal motor car**.
---
### Summary:
| Aspect | Treatment |
| ---------------------------- | -------------------------------------------------------------------- |
| Depreciation claim (Tax) | Not allowed on personal use car |
| Personal balance sheet value | Cost price or cost less your chosen depreciation (not tax-impacting) |
| Capital gains on sale | No capital gains tax on sale of personal motor car (movable asset) |
---
### Important:
* If the motor car is used for **business or profession**, you can claim depreciation under Income Tax law and capital gains calculation would then apply on sale considering written down value.
* For **personal assets**, no depreciation claim and no capital gains tax on sale.
---
If you want, I can help you with examples or further explanation on how to maintain your personal balance sheet or calculate capital gains in different scenarios. Would you like that?
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