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-   -   IT department tells car dealers to report transactions above Rs 2 lakh (https://www.team-bhp.com/forum/indian-car-scene/179515-department-tells-car-dealers-report-transactions-above-rs-2-lakh.html)

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

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.

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.

What about the second hand market?

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.

+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 :uncontrol

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.

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.

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.

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.

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.

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?

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.

I agree to this. NEXA was allowing full payment of cash for the S-Cross as well when asked. :Shockked:
However, that was just an 'asking thing' and did not go ahead with it clap:

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!