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Old 17th August 2007, 18:55   #16
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It is indeed a crazy idea. The moment you form the private limited company, you will be mobbed by Labour, IT, PF and other applicable government departments. You would hire a accountant just to keep track of all the documentation, and maintenance of all the various ledgers. The cost of this tax saving scheme will turn out so high, after some time you will gladly accept even a 50% hike in LTT, it is cheaper than maintaining a Private limited company. Let's not even talk about publc limited company.
My point is not about economy of maintaining a company; but how will the govt. determine if the car owned by the company is mine or not if the company is owned by me? The purpose fo the law is defeated if people resort to such means.
Previously when sales tax was very high in Kerala, people purchased cars from Pondy; and when the state introduced an entry tax for new vehicles from outside the state, the vehicles were registered in pondy itself. For businessess, it was not difficult to get an address of convenience. Such mechanisms to overcome economic burden are not difficult to cook up.
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Old 17th August 2007, 19:12   #17
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Well, your hypothetical scenario is, well, too hypothetical. However I think a part of it is actually meaningful and it is bound to be very practical in this scenario as well. Tomorrow if I need another car and purchase it in my wife's name what happens in that case? I know the RTA systems can fish out the same addresses easily but then legally speaking as an individual my wife can very well buy a car. Government can not say that it is going to the same household and hence higher taxes. If that had been the case then IT department can also come and say that you and your wife both can not take advantage of the slab system of IT calculation. So we will club your incomes and then calculate tax liability on the complete sum. Is it legally tenable?
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Old 18th August 2007, 16:17   #18
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Originally Posted by BaCkSeAtDrIVeR View Post
My point is not about economy of maintaining a company; but how will the govt. determine if the car owned by the company is mine or not if the company is owned by me? The purpose fo the law is defeated if people resort to such means.
Previously when sales tax was very high in Kerala, people purchased cars from Pondy; and when the state introduced an entry tax for new vehicles from outside the state, the vehicles were registered in pondy itself. For businessess, it was not difficult to get an address of convenience. Such mechanisms to overcome economic burden are not difficult to cook up.
But, the Pondy vehicles were known to be very slow movers/headache in the resale market.
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Old 18th August 2007, 16:21   #19
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Here is a crazy idea:-
I own a car.
New car is in my wife's name.
I and wife form a LImited liability company (not a partnership).
The third car is in name of the company.
Me and wife float 4 other limited liability company (Pvt. Ltd co).
Me + wife + first company + 4 other company = 7 persons. Together, they form a public limited company. A fourth car is owned by the public limited co. (Cars for the other 4 pvt. limited companies is optional).
What will the law do?

Well said . This is what ever person do in business also to save tax. HAHAHAH
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Old 18th August 2007, 17:59   #20
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A typical babu/politico solution for a problem created by them in the first place. For years after independence these worthied died nothing to vcreate a decent public transport system/ transport infrastructure pushing people to private transport. Then " tax the people for the luxury of private cars".

Needless to say the people who frame such policies travel in official transport financed by the tax payers rupee in huge cavalcades. Even mid ranking police officres move in cavalcades of 4-5 vehicles( including wife going to shop for veggies or children being dropped for tutions/school) and every self respecting MLA/mlc moves in car cades of 5-6 SUV's ( mostly benami or financed by well wishers).

If only the size of the government ( legislature and the executive) can be pruned and the money saved spent on transport infrastructure Indian cities would be much better. But if wishes were horse I would be driving a Ferrari....
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Old 18th August 2007, 18:15   #21
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Well.. I want to have 7 cars minimum..1 per each day of the week..

Here's what I'll do .. Run a Proprietory concern And a Pvt. Ltd. company..thats 2 cars..

For the balance 5..form 5 pvt. ltd. companies with say some employee..of the pvt. ltd. company and buy a car in that new company..likewise..we could add cars as many as the employees exist..

Now..a theory of increasing Tax to the second car may not work..
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Old 9th September 2008, 10:40   #22
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Quote:
Originally Posted by BaCkSeAtDrIVeR View Post
Here is a crazy idea:-
I own a car.
New car is in my wife's name.
I and wife form a LImited liability company (not a partnership).
The third car is in name of the company.
Me and wife float 4 other limited liability company (Pvt. Ltd co).
Me + wife + first company + 4 other company = 7 persons. Together, they form a public limited company. A fourth car is owned by the public limited co. (Cars for the other 4 pvt. limited companies is optional).
What will the law do?
Nice Idea, however each company formation costs 25k adding to the cost of your operations/business. Add to that various administrative costs, filing returns, Company secretary (even if shared), Chartered Accountant. Do the math it makes no sense, yes if yo are a coglomerate it is okay, yet cost ineffective.
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Old 9th September 2008, 11:06   #23
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In Singapore, to prevent traffic congestion they have a system called Vehicle Quota System (VQS). This helps in restricting the number of cars on the road.

To buy a car a person has to first bid for a Certificate of Entitlement (CEO) and its valid for 10 years.
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Old 9th September 2008, 12:40   #24
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Originally Posted by diwa View Post
In Singapore, to prevent traffic congestion they have a system called Vehicle Quota System (VQS). This helps in restricting the number of cars on the road.

To buy a car a person has to first bid for a Certificate of Entitlement (CEO) and its valid for 10 years.
Even the Singapore system is nothing home to write about. What kind of a system to inhibit the citizen's freedom! More over that was possible only because Sing does not have a home grown Auto industry. Now lets talk about countries which not only have home grown auto industry but also want to be the hubs for production of small cars and hubs for innovation etc. I dont want my country to be cooked up in the legislative puddle like Sing. Personal freedom is of utmost importance. The only country ideally we should compare ourselves to and to look up for precedence is USA or the European Union. The car industry pressures and the job pressures, socio political economic pressures of our country are more resembling those of these countries.

Last edited by sridhga : 9th September 2008 at 12:42.
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Old 9th September 2008, 13:11   #25
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This thread is over a year old !
Has this law actually been enforced ?
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Old 9th September 2008, 14:10   #26
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Originally Posted by cooldude1988765 View Post
This thread is over a year old !
Has this law actually been enforced ?
It has been enforced dude and I'd like to further add that whoever was planning to buy it in different companies names, would be disappointed to know that the tax applicable on companies are at par with the tax applicable on a second car owned by an individual.
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Old 9th September 2008, 14:21   #27
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Seriously, has this rule been implemented? And when did this rule come into play any idea
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Old 9th September 2008, 14:26   #28
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In order to reduce the number of cars on the roads, this is a very bad idea. Also, practically not possible to implement and has quite a few loose ends.

The best way would be to improve public transport, build centralized parking lots and charge New York City kind of rates, and finally have a special tax for CBD like Singapore and London. I feel that these are more practical and implementable policies than taxing the second car.
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Old 9th September 2008, 14:27   #29
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Seriously, has this rule been implemented? And when did this rule come into play any idea
I know this is case since 6 months atleast.Nout sure of the exact date though.
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Old 9th September 2008, 16:38   #30
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This law i think is more of a money making scheme for the government rather than a sales deterrent. A person is spending 5 lakhs on a second car would not think of Rs. 10000. Although one might feel the pinch, the decision of buying a second car will not be changed. The car could also be registered outside hyderabad.
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