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Car purchase for wife
If a proprietor purchase car for wife, what would be treat in accounts rule.
Replies (5)
From an accounts point of view if the car is purchased out of proprietor funds you can go ahead and record it has an asset in the books of accounts but from income tax point of view if car is not used for proprietor business purpose you won't be allowed depreciation on it then.
You can also show it gift to wife. It will be deduct from your capital a/c
and gift in hand of wife also not taxable
and gift in hand of wife also not taxable
But will it be beneficial to the assessee ? As if the purchased car is used as for business purpose depreciation can be claimed but as a gift in hands of wife and not used for business purpose would benefit him as even if in future car is sold it will be sold below the cost
Would not benefit him*
It depends on assesse what it want.
It can we show as gift where he has no benefit or claim as fixed assets.
No one to come to check that car is using in business use or personal.
It can we show as gift where he has no benefit or claim as fixed assets.
No one to come to check that car is using in business use or personal.
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