10-29-2011, 01:22 PM
<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica, san" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by amerrafique</i>
<br />Assalam o Alaikum
Your reply was very comprehensive student of law and was based on the assumption that the car was not used for the purpose of business hence no deduction under section 22 is permissible. so any difference between the selling and the buying price is capital loss. if u could further explain the following scenario
should this loss of 150 thousand be reflected at s.no. 19 of the income tax return and a set off of this loss against income under any other head be worked out (section 56) and the taxable income be shown 450 thousand (600000-150000) or the taxable income will be 600000 as explained by you and this loss will become a part of wealth reconciliation.
Regards
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Loss on disposal of asset is deductible only against the gain on disposal of asset and not otherwise. Relevant section is 59 that says "Where a person sustains a loss for a tax year under the head #8213;Capital Gains(hereinafter referred to as a #8213;capital loss, the loss shall not be set off against the personâs income, if any, chargeable under any other head of income for the year, but shall be carried forward to the next tax year and set off against the capital gain, if any, chargeable under the head #8213;Capital Gains#8214; for that year."
Loss on capital asset does not affect any other head.
If we read s.38, we find another limitation. If you are calculating taxable capital gain then such gain would not be reduced by loss on disposal of an asset where gain on that asset is not taxable.
Whether gain on sale of car is taxable or not in view of s.37(5)(d) <i>[held for personal use</i>], is another issue. On this matter I have expressed my views at the following link however, further research is needed.
http//www.accountancy.com.pk/forum/topic.asp?topic_id=26515
<br />Assalam o Alaikum
Your reply was very comprehensive student of law and was based on the assumption that the car was not used for the purpose of business hence no deduction under section 22 is permissible. so any difference between the selling and the buying price is capital loss. if u could further explain the following scenario
should this loss of 150 thousand be reflected at s.no. 19 of the income tax return and a set off of this loss against income under any other head be worked out (section 56) and the taxable income be shown 450 thousand (600000-150000) or the taxable income will be 600000 as explained by you and this loss will become a part of wealth reconciliation.
Regards
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Loss on disposal of asset is deductible only against the gain on disposal of asset and not otherwise. Relevant section is 59 that says "Where a person sustains a loss for a tax year under the head #8213;Capital Gains(hereinafter referred to as a #8213;capital loss, the loss shall not be set off against the personâs income, if any, chargeable under any other head of income for the year, but shall be carried forward to the next tax year and set off against the capital gain, if any, chargeable under the head #8213;Capital Gains#8214; for that year."
Loss on capital asset does not affect any other head.
If we read s.38, we find another limitation. If you are calculating taxable capital gain then such gain would not be reduced by loss on disposal of an asset where gain on that asset is not taxable.
Whether gain on sale of car is taxable or not in view of s.37(5)(d) <i>[held for personal use</i>], is another issue. On this matter I have expressed my views at the following link however, further research is needed.
http//www.accountancy.com.pk/forum/topic.asp?topic_id=26515
