Buying Car On Cash or Loan? Income Tax Problems

[Ashok469]

Hi,
Am going to bought a car of cost around 15L by cash ,is there any impact from Income tax point of view.
And am receiving funds from third party financial institutions.

Or Guide me how to proceed to buy a car.

And Explain me what are cash transactions means ??

 

[allhyundaicars]

You can only pay a maximum of two lakh rupees in cash for any transaction you do. You cannot pay 15 lakhs cash for anything (under the table is a different thing)

This means you have to deposit 13 lakh rupees in your bank account and pay 2 lakhs cash plus 13 lakhs from bank to pay for the car. Obviously if you deposit 13 lakhs in bank , IT department will want to know your source of income for this deposit. It's better to consult your CA before buying and do what he says. Or else buy a second hand car , I don't have any experience in buying a second hand car but I think they will happily accept cash payments.

 

[Nairrk]

I fully agree with @allhyundaicars

Further, how can any third party financial institutions pay you 15 lakh in cash (you mean local money lenders, those who always deal with these kind of under the table dealings)?.

Suggest, go for a proper loan from any bank and the dealing will be clean and no need to worry about IT people.!