I had a jeep which i purchased (for approx.5lakh) in 2002 and used for my farm (agriculture) work. I have sold this jeep for 1.5lakh in May-2011. Previously I have never had to file returns because my income was completely non-taxable. I have filed returns only for last 3 years. And i have never claimed any depreciation for the jeep value.
My question is - is the sale proceed of the jeep considered as capital receipt or revenue receipt ?
If it is a capital receipt, then would Capital Gain Tax be applicable ? Would a depreciated value of the vehicle be considered for computing capital gain tax ? Or would it figure as a capital loss ?
If it is a revenue receipt, will it be clubbed with my other income (which is non-agriculture income since april-2011) ?
I have sold another farm asset (equipment) on the same terms (5-6 years use, no depreciation claimed), but at a price which is higher than the purchase price.
Please explain what sort of tax i would be paying, and how it will be computed.
Thank you,
Shriniwas.
CAclubindia
