IT department tells car dealers to report transactions above Rs 2 lakh

autobahnjpr · 29th August 2016, 21:50

After jewellers, auto dealers have been asked to report transactions above Rs two lakh in respect of purchase of three-wheelers and four-wheelers.

Directorate of Income Tax (criminal and investigation) S S Rana today said that motor vehicle dealers would have to mandatorily quote the PAN number of buyers other than two-wheelers according to the provisions of new income tax rules which came into force from January, 2016.

The dealers would also have to furnish details of cash transactions above Rs two lakh for buyers who do not have PAN cards in separate forms provided by the department.

These details were required for any transactions above Rs two lakh either by cash or cheque, Rana said at a meet here.

Already cash squeeze has been applied in property market and now buying a car in cash with unaccounted money will be very risky. Although it will squeeze unaccounted money out of circulation but in a way it will affect the money circulation. This unaccounted money after car purchase became accounted money through dealer revenue, company revenue, employee salary etc. and got circulated in the economy.

With this step and the corresponding squeeze in cash circulation, it is anybody's guess where this unaccounted money will be spent.

And with the implementation of GST, the whole cash economy is set to reduce to a large extent.

Read more at:
http://economictimes.indiatimes.com/...campaign=cppst

vagabond128 · 30th August 2016, 09:00

Reducing black money from economy is very important.

This along with increased transparency can reduce corruption and grow economy.

Only problem is that government keeps bringing in more and more cumbersome rules. These don't help.

GST is a good initiative. It not just reduces black money by improving compliance but also simplifies processes.

Government needs to be creative and think of more such ideas.

GTO · 30th August 2016, 13:44

Good move. If you pay your taxes, you have nothing to fear. If you don't, well....about time you start.

Only thing I don't agree with is excluding two-wheelers. Why? With so many big bikes around, I'm sure there are a lot of black-moneyed dudes buying them.

Deep Blue · 30th August 2016, 14:06

What about the second hand market?

nkrishnap · 30th August 2016, 14:09

Quote:

Originally Posted by GTO

Good move. If you pay your taxes, you have nothing to fear. If you don't, well....about time you start.

Only thing I don't agree with is excluding two-wheelers. Why? With so many big bikes around, I'm sure there are a lot of black-moneyed dudes buying them.

Spot on. The Two wheelers too should be included into this. The number of bikes selling between 3-10 lakhs have been increasing year on year thanks to multiple companies launching their products here.

I feel this one too will be covered in a year.

djay99 · 30th August 2016, 14:12

Quote:

Originally Posted by GTO

Only thing I don't agree with is excluding two-wheelers. Why? With so many big bikes around, I'm sure there are a lot of black-moneyed dudes buying them.

+1. I was at a Kawasaki showroom last year and a dude wanted to buy ZX-10R by paying full cash and dealer agreed to it. I asked sales manager if this is right practice, he said they will adjust this money some where in book of accounts. Probably IT department have not included two wheelers as volume is on lower side or they might not be aware of cost of such big bikes

The Rationalist · 30th August 2016, 14:25

The noose is tightening, the day is not far even used cars will come under the taxman's lens. I would welcome it, as honest tax payers like me who report income even when one can hide it are left looking like fools. You can't punish people for being honest.

What happens to black money is the problem of those hoarding it. You can't allow black money to work, saying ours is a black money economy. The economy will only grow if this menace is curbed.

anilp · 30th August 2016, 14:38

Great move. I hope this extends to the pre-owned car dealers as well. A large part of the used cars market transactions is often through black money.

earthian · 30th August 2016, 15:00

Yes, the noose is slowly tightening. But there is still a lot of loopholes and many a slip between cup and lip.
If A wants to buy a car with black money, what he does is scout around for a dependable person B with enough white. He asks B to buy the car in his (B) name and pays B the cash equivalent (and something more, to sweeten the pie, if required). B can claim depreciation ( if he has scope to do so ) and hence gets a tax break. After a year or so, A can buy the car back at less than 50% of the original value by giving A a cheque and collecting the equivalent cash. As i said, this can be done if A wants to do so. Else, he enjoys the car with B as the owner. The mind set of people who have black money, is that "it is free" anyway. Meaning, the money saved by NOT paying taxes.

sathya_g_m · 30th August 2016, 16:16

Good move. Simply, change the RTO rules to accept vehicle for registration only if the transaction is made via a bank account. I wouldn't accept that someone who doesnt have a bank account will be selling/buying a vehicle.

drmohitg · 30th August 2016, 16:49

But wasn't PAN card already a mandatory requirement by the dealer when you buy a car? IIRC we were asked to submit one, all three times that we have bought new cars in the last 5 years.

Jaggu · 30th August 2016, 17:00

Quote:

Originally Posted by drmohitg

But wasn't PAN card already a mandatory requirement by the dealer when you buy a car? IIRC we were asked to submit one, all three times that we have bought new cars in the last 5 years.

Exactly PAN was needed for a long time, they now even have an advance tax component similar to TDS on all purchases about 4 lakhs also? Atleast in BLR i have seen PAN being mandated for quite a while.

drmohitg · 30th August 2016, 17:02

Quote:

Originally Posted by Jaggu

Exactly PAN was needed for a long time, they now even have an advance tax component similar to TDS on all purchases about 4 lakhs also? Atleast in BLR i have seen PAN being mandated for quite a while.

So then how does this news change anything? Once your PAN number is on record at the time of sale, it rules out any black money transaction right?

sammyboy · 30th August 2016, 17:04

Good move, but I think its time for also going to the next step i.e. Validating the PAN provided with the person's details. With so many fake PAN cards going around, validation is the most important part.

GranvilleDsouza · 30th August 2016, 17:05

I agree to this. NEXA was allowing full payment of cash for the S-Cross as well when asked.

However, that was just an 'asking thing' and did not go ahead with it

The used car/bike market needs to be looked at the same way. I know people who buy only used cars/bikes for this very reason!

29th August 2016, 21:50	#1
autobahnjpr BHPian Join Date: Dec 2014 Location: Jaipur, Noida Posts: 318 Thanked: 1,122 Times	IT department tells car dealers to report transactions above Rs 2 lakh After jewellers, auto dealers have been asked to report transactions above Rs two lakh in respect of purchase of three-wheelers and four-wheelers. Directorate of Income Tax (criminal and investigation) S S Rana today said that motor vehicle dealers would have to mandatorily quote the PAN number of buyers other than two-wheelers according to the provisions of new income tax rules which came into force from January, 2016. The dealers would also have to furnish details of cash transactions above Rs two lakh for buyers who do not have PAN cards in separate forms provided by the department. These details were required for any transactions above Rs two lakh either by cash or cheque, Rana said at a meet here. Already cash squeeze has been applied in property market and now buying a car in cash with unaccounted money will be very risky. Although it will squeeze unaccounted money out of circulation but in a way it will affect the money circulation. This unaccounted money after car purchase became accounted money through dealer revenue, company revenue, employee salary etc. and got circulated in the economy. With this step and the corresponding squeeze in cash circulation, it is anybody's guess where this unaccounted money will be spent. And with the implementation of GST, the whole cash economy is set to reduce to a large extent. Read more at: http://economictimes.indiatimes.com/...campaign=cppst
	(16) Thanks

30th August 2016, 09:00	#2
vagabond128 BHPian Join Date: Nov 2013 Location: Bangalore Posts: 93 Thanked: 229 Times	re: IT department tells car dealers to report transactions above Rs 2 lakh Reducing black money from economy is very important. This along with increased transparency can reduce corruption and grow economy. Only problem is that government keeps bringing in more and more cumbersome rules. These don't help. GST is a good initiative. It not just reduces black money by improving compliance but also simplifies processes. Government needs to be creative and think of more such ideas.
	(2) Thanks

30th August 2016, 13:44	#3
GTO Team-BHP Support Join Date: Feb 2004 Location: Bombay Posts: 70,468 Thanked: 300,029 Times View My Garage	re: IT department tells car dealers to report transactions above Rs 2 lakh Good move. If you pay your taxes, you have nothing to fear. If you don't, well....about time you start. Only thing I don't agree with is excluding two-wheelers. Why? With so many big bikes around, I'm sure there are a lot of black-moneyed dudes buying them.
	(11) Thanks

30th August 2016, 14:06	#4
Deep Blue BHPian Join Date: Sep 2009 Location: Udupi Posts: 747 Thanked: 684 Times	re: IT department tells car dealers to report transactions above Rs 2 lakh What about the second hand market?
	(1) Thanks

30th August 2016, 14:25	#7
The Rationalist BANNED Join Date: Apr 2015 Location: Kochi Posts: 924 Thanked: 7,277 Times	re: IT department tells car dealers to report transactions above Rs 2 lakh The noose is tightening, the day is not far even used cars will come under the taxman's lens. I would welcome it, as honest tax payers like me who report income even when one can hide it are left looking like fools. You can't punish people for being honest. What happens to black money is the problem of those hoarding it. You can't allow black money to work, saying ours is a black money economy. The economy will only grow if this menace is curbed.
	(4) Thanks

30th August 2016, 14:38	#8
anilp BHPian Join Date: Aug 2014 Location: City of Dreams Posts: 338 Thanked: 388 Times	Great move. I hope this extends to the pre-owned car dealers as well. A large part of the used cars market transactions is often through black money. Last edited by manson : 30th August 2016 at 15:24. Reason: Mod Note : Please quote ONLY the relevant bits of a post. Quoting a full, long post inconveniences our mobile readers.
	(1) Thanks

30th August 2016, 15:00	#9
earthian BHPian Join Date: Jan 2016 Location: Ahmedabad Posts: 611 Thanked: 2,123 Times	re: IT department tells car dealers to report transactions above Rs 2 lakh Yes, the noose is slowly tightening. But there is still a lot of loopholes and many a slip between cup and lip. If A wants to buy a car with black money, what he does is scout around for a dependable person B with enough white. He asks B to buy the car in his (B) name and pays B the cash equivalent (and something more, to sweeten the pie, if required). B can claim depreciation ( if he has scope to do so ) and hence gets a tax break. After a year or so, A can buy the car back at less than 50% of the original value by giving A a cheque and collecting the equivalent cash. As i said, this can be done if A wants to do so. Else, he enjoys the car with B as the owner. The mind set of people who have black money, is that "it is free" anyway. Meaning, the money saved by NOT paying taxes.
	(3) Thanks

30th August 2016, 16:16	#10
sathya_g_m BHPian Join Date: Jul 2007 Location: Chennai Posts: 183 Thanked: 115 Times	re: IT department tells car dealers to report transactions above Rs 2 lakh Good move. Simply, change the RTO rules to accept vehicle for registration only if the transaction is made via a bank account. I wouldn't accept that someone who doesnt have a bank account will be selling/buying a vehicle. Last edited by GTO : 31st August 2016 at 11:07. Reason: Typo
	(1) Thanks

30th August 2016, 16:49	#11
drmohitg Distinguished - BHPian Join Date: Sep 2010 Location: Liverpool/Delhi Posts: 5,439 Thanked: 7,539 Times	re: IT department tells car dealers to report transactions above Rs 2 lakh But wasn't PAN card already a mandatory requirement by the dealer when you buy a car? IIRC we were asked to submit one, all three times that we have bought new cars in the last 5 years.
	(1) Thanks

30th August 2016, 17:04	#14
sammyboy Senior - BHPian Join Date: Jul 2006 Location: Ggn/Dehradun Posts: 1,842 Thanked: 521 Times View My Garage	re: IT department tells car dealers to report transactions above Rs 2 lakh Good move, but I think its time for also going to the next step i.e. Validating the PAN provided with the person's details. With so many fake PAN cards going around, validation is the most important part.
	(1) Thanks

30th August 2016, 17:05	#15
GranvilleDsouza BHPian Join Date: Apr 2016 Location: Mumbai Posts: 138 Thanked: 312 Times View My Garage	re: IT department tells car dealers to report transactions above Rs 2 lakh I agree to this. NEXA was allowing full payment of cash for the S-Cross as well when asked. However, that was just an 'asking thing' and did not go ahead with it The used car/bike market needs to be looked at the same way. I know people who buy only used cars/bikes for this very reason!
	() Thanks

Thread Tools	Search this Thread
	Search this Thread: Advanced Search