Sale of personal car

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Friends,

A salaried assessee purchased a car for personal use 6 years back at 4 lakhs. He sold the car at 1 lakh this month. How to compute loss/profit on sale. Will there be indexation benefit given. Will depreciation be allowed. Note this is not for business use.

Regards,

Replies (5)
No capial gain will come in this case as "personal effects" that is to say, movable property. Please refer to definition of capital assets section 2(14). Regards

Dear Dipjyoti,

Under section 2(14) of the income tax act says that personal assets of movable nature does not coming in the purview of capital asset.Hence there is no capital gain arises on sale of motor car and hence no taxability.

 

Thank you for your observations.

So, there is no capital gain as it is not a capital asset. But can there be a stand that it is income from other sources if there is a profit on sale of an asset and liable to be taxed.

Regards,

Hi,

Profit or loss arises only in the case you are engaged in business/ profession. Here it is not applicable.

GAIN ON SALE OF PERSONAL ASSETS ARE NOT TAXABLE U/H CAPITAL GAIN AS THEY DO NOT FORM THE PART OF CAPITAL ASSET

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