Purchase of new assest impact on assessment

Tax planning 576 views 3 replies

harsha

27 Points Joined August 2009

Hi to all,

Mr.A who is an assessee of having income below basic exemption limit.He assessed his income 4 years back.He want to purchase the new assesst worth 30 lakhs during the financial year 2013-14.what are tax implications raised on purchase of his asset and what is the process of assessment of his income in next year.

Please clarify the follwoing

1.Is this compulsory to assess his income for last four years.He has income source of salary.?

2.He has an agriculgural land and spends some amt for cultivation then such exp can be claimed for reducing the value of new assesst purchased.?

3.what is the tax planning method to reduce the tax payment if any arised during such purchase of such assesset?

Replies (3)

Mihir

Wealth Manager

5293 Points Joined December 2008

When a capital asset is sold, the income earned after computation of capital gains shall be taxable. But there is no tax on capital asset purchased. However, the documentation of this purchase should be complete and clear, and you should be able to explain the source of this expenses/investment to purchase this asset.

harsha

27 Points Joined August 2009

Thank u for u r reply sir.I will surely provide the details....

harsha

27 Points Joined August 2009

The source of this expense is the savings made from last 20 years.from the maturity amounts of savings the investment is made.Is there any impact when source of income is not explained properly.?

If the source of income is explained properly then what is the tax planning which gives benifit to the assesee?