Tax on used car profit

Tax on used car profit

I plan to buy a used car and sell it for a profit within a month. Am i liable to pay tax on the profit margin ?
If yes, what tax and if not, can i do the same once every financial year ?
Thanking you in advance for your kind help. You guys are the best.

Asked 8 years ago in Capital Gains Tax

Dear Sir,

Sale of used car does not attract capital gain taxes but if it becomes routine phenomenon and you start doing business of selling used cars, it will be treated as business income.

Please let me know if you have any questions.

Thanks and Regards

CA Abhishek Dugar

Abhishek Dugar

CA, Mumbai

3576 Answers

183 Consultations

4.8 on 5.0

Talk to Abhishek Dugar

Dear Sir,

As per the details provided by you, it appears that you are planning to buy a Car with an intention to resell it later at a profit. In such a case the amount of profit made by you will be taxed under the head Income from Other Sources and will be charged to tax as per your slab rate.

If your intention is to keep buying such cars and sell them, then it will be taxed under the head Business & Profession.

Trust this clarifies your query.

Please feel free to call/ get back in case of any further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP