Quote:
Originally Posted by shuvc  Due to this 5 year rule, the resale market dynamics are also somewhat affected. People do consider selling before the 5 year mark. And valuations of cars nearing the 5 year mark gets adjusted with the tax to be paid soon.
In a way the rule suits people who plan to change cars just short of 5 years. The first owner pays tax and uses the car for the full 5 year period and then the second owner pays for the next 5 yr period.
Now considering that a car owner needs to pay tax every 5 years anyway, if you replace your old car with a new one every 5 years, you would at least be paying the tax each time for a new car.
But yes, if you plan to sell off after, say 7 years, then you pay tax on year 0, year 5 and again year 7 when you buy your replacement.
So timing is key  |
how good, or bad, is the compliance?
Especially with cheap vehicles and two wheelers in rural areas.