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Exemption in car loan

14 June 2016

Dear sir / madam,

I am a public sector employee and I have a commecial car which I am using for commercial purpose only. The invoice date of this car is 30/07/2015 & the registration of this car is 26/11/2015. I want to fill ITR 4S.

1) Please calculate the depreciation amount for that car.

2) In which u/s of Income tax I can take the claim of interest of car laon ? Loan taken from Tata motor Finance.

3) I have taken a personl loan of Rs.1 lac from Bajaj Finserv also for purchase of that car. Can I claim the exemption of interest of that personal loan. Which U/S ?

4) Any special format for calculation of Inome form Car.

Please provide if any other detail avilable.

Suhhash Choudhary

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2 Replies

SUPRIYA (PRACTICE) (853 Points)
Replied 14 June 2016

To claim depreciation you need to fulfill following criteria: 1. Asset should be owned by assessee 2. Asset should be used for business or profession 3. Asset should be used during financial year. If the above conditions are fulfiled depreciation can be claimed u/s 32 As you mentioned your car received registration on 26.11.2015 so using it before registration is not going to happen. so you will have to claim depreciation for half year (at half rate )only. Regarding your car loan from Tata Motor finance- You can claim it as business expenditure against your business income u/s 37 Regarding personal loan, in my opinion if you can prove that the same is utilised for business then only you should claim it as business expenditure. If your Net income from car business is more than 8% ( after claiming all expenses) you should declare it u/s 44AD. if it is less then 8% you will have to get your books audited. Hope your all query are solved.