CAF-2 · Chapter 9 · Question 12 of 15
Mr. Junaid sold his personal use car for Rs. 2,000,000, which he had originally purchased for Rs. 1,500,000. He also sold an antique watch for Rs. 150,000, which his mother had gifted him (her original cost was Rs. 50,000). What is his total taxable capital gain?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) C) Rs. 100,000
Explanation
A personal vehicle is specifically excluded from the definition of a capital asset, so the Rs. 500,000 gain on the car is exempt. The antique watch is a capital asset. For assets acquired by gift from a relative, the original cost of the transferor (Rs. 50,000) is taken as the cost. Capital gain = 150,000 - 50,000 = Rs. 100,000.
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