An employer had provided a Car exclusively to an executive for use and after 5 years, the car is transferred from the Company's name to the Executive's name and tax on WDV is recovered. If the executive propose to sell the car after 3 months, whether it would attract income tax or being a movable asset and Car being a personal movable item, would not attract capital gain.
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Taxability of used car
Replies (3)
Car is not a capital asset since held for personal use, thus no capital gain
attract STCG/STCL
if the car was transferred by the company to the employee for an adequate consideration and then the employee transferred it, there is no income tax on surplus as this car is "personal effect" and not a capital asset therefore attracts no capital gains. If employee gets the car without adequate consideration, then I think gift provisions will apply and he has to pay income tax at the time of acquisition of the car from the company.
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