10-01-2011, 11:15 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 olympia</i>
If a vehicle cost Rs 1,000,000 & Employee pay 50% Rs 500,000 after 5 years employee get the ownership of that vehicle now he sold out the vehicle suppose Rs 900,000. Did he liable to pay tax in this case? Someone tell me that this is casual sale & employee didn't need to pay any tax on this income. Is this correct?
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote"> there is nothing like Casual sale recognized under the Ordinance. The head Income from other sources has made all incomes taxable unless specifically exempted by the Ordinance.
Till 5 year employee was owner of 50% interest in vehicle
After 5 years did he pay any further amount to acquire remaining 50% interest from employer? You did not mention this aspect. Suppose yes, he paid rupees 3 lac. So his total cost of acquisition is 5lac + 3 lac = 8 lac.
Sale is for 9 lac.
Gain / income will be 9 - 8 = 1 lac.
Suppose that he did not pay anything to acquire remaining 50% interest of employer in vehicle. In this case transfer of 50% interest in bike to employee will be treated as perquisite and employer would add its market value to the salary of the employee upon which employee would pay tax. The value so added will be the cost of acquisition of remaining 50%. I think, not sure, that s.76(8) speaks of this situation.
For example , while transferring asset to employee, employer adds 300,000 rupees to the salary of employee. So the total cost of acquistion of vehicle for employee would be 5 lac + 3 lac = 8 lac.
if sale price is 9 lac. Capital Gain would be 9 lac - 8lac = 1.
The above was the method of calculating capital gain. Now the question is whether this capital gain is taxable. It is not taxable under the head capital gain because capital gain is on disposal of capital assets while under s.37(5)(d) movable property held for personal use is not a capital asset.
Now the question is then whether this gain is chargeable under the Head income from other sources. I am currently researching on this issue.
If a vehicle cost Rs 1,000,000 & Employee pay 50% Rs 500,000 after 5 years employee get the ownership of that vehicle now he sold out the vehicle suppose Rs 900,000. Did he liable to pay tax in this case? Someone tell me that this is casual sale & employee didn't need to pay any tax on this income. Is this correct?
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote"> there is nothing like Casual sale recognized under the Ordinance. The head Income from other sources has made all incomes taxable unless specifically exempted by the Ordinance.
Till 5 year employee was owner of 50% interest in vehicle
After 5 years did he pay any further amount to acquire remaining 50% interest from employer? You did not mention this aspect. Suppose yes, he paid rupees 3 lac. So his total cost of acquisition is 5lac + 3 lac = 8 lac.
Sale is for 9 lac.
Gain / income will be 9 - 8 = 1 lac.
Suppose that he did not pay anything to acquire remaining 50% interest of employer in vehicle. In this case transfer of 50% interest in bike to employee will be treated as perquisite and employer would add its market value to the salary of the employee upon which employee would pay tax. The value so added will be the cost of acquisition of remaining 50%. I think, not sure, that s.76(8) speaks of this situation.
For example , while transferring asset to employee, employer adds 300,000 rupees to the salary of employee. So the total cost of acquistion of vehicle for employee would be 5 lac + 3 lac = 8 lac.
if sale price is 9 lac. Capital Gain would be 9 lac - 8lac = 1.
The above was the method of calculating capital gain. Now the question is whether this capital gain is taxable. It is not taxable under the head capital gain because capital gain is on disposal of capital assets while under s.37(5)(d) movable property held for personal use is not a capital asset.
Now the question is then whether this gain is chargeable under the Head income from other sources. I am currently researching on this issue.
