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Old 22nd September 2021, 23:43   #31
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Re: Not filed your IT returns? 5% TCS on new car!

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Originally Posted by matizcrazy View Post
As always, wild allegations and insinuations will be made against the lawmakers;
None are being made here though.


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Originally Posted by matizcrazy View Post
also specific situations will be quoted in an attempt to establish the rule as being thoughtless.
Almost as if the rational thought is that if there exist specific situation that make the rule absurd, then the rule is just that.

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Originally Posted by matizcrazy View Post
It only seeks that a person, who has enough money to buy a new vehicle, should keep a small sum with the Govt, just 5 pc, so that the Govt can get an idea where your money is coming from in the subsequent IT return that you will file, in order to claim a refund.
1. Isn't that a really long way to go about it though? Why not just look up my PAN? Why should I* be made to go through extra hurdles when there exist easier ways that the state isn't implementing?

*"I" is the figurative I, not literally me. I feel it's necessary to clarify lest people might consider me to not have any "intention of paying taxes / filing returns / divulging his source of income". All my transactions are whiter than a certain someone's beard. Save the personal attacks.

2. So a person does have to file the ITR then?

3. Why should I be made to keep even a single penny with the government, if there's no public good that's coming out of it (and, if there is a reasonable public interest, how is it being furthered through this policy, considering the points 1 & 2 above)?

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Originally Posted by matizcrazy View Post
I don't see why anyone should have a problem unless he has no intention of paying taxes / filing returns / divulging his source of income to the Govt of India.
Something about the "wild allegations and insinuations" should be considered here, eh?

On a similar note, I don't see why anyone would NOT question all the actions of their government and scrutinise it closely to ensure (a) efficient working and (b) legal + constitutional compliance. Criticising anyone who seeks to question the way a policy is being implemented on the grounds of "oh you have something illegal haww" is contrary to the democratic spirit, and frankly, childish.


Peace out.

Last edited by N.A.GTC : 22nd September 2021 at 23:48.
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Old 23rd September 2021, 00:37   #32
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Re: Not filed your IT returns? 5% TCS on new car!

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I think this extra TCS helps pay the salary of employees to catch the tax evaders at their own cost! Truly a business mind.
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How does that solve the problem of tax non compliance?

Seems a band-aid solution to a brain injury problem.
Not sure if your comment was in jest. But as I said before, this is a band aid approach for a problem that is the size of a brain injury. Salary of Income Tax employees is not the burning problem that our nation needs to address.

Last edited by warrioraks : 23rd September 2021 at 00:38.
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Old 23rd September 2021, 04:58   #33
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Re: Not filed your IT returns? 5% TCS on new car!

Few points

5 lakhs is not the exemption limit, 2.5/3 lakhs is. For senior citizens, the limit is 3 lakhs. Right now govt gives a rebate to working individuals so that they don't have to pay tax on income till 5 lakhs. Senior citizens have to pay tax on income above 3 lakhs.

If the govt is asking for additional 5% TDS for non filers, then why they are asking to pay 1% TDS from those who have filed for years.

It's not about unearthing black money or like that, it's about getting more money quite early from the common people especially from those who buy cars, a very small percentage which isn't significant electorally for political parties.

IT dept can always ask questions to those who buy big ticket items without filing ITR or filing low ITR(tax evasion). They don't need TDS to figure that out.
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Old 23rd September 2021, 09:59   #34
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Re: TCS on sale of vehicles above Rs. 10 lakhs reduced to 0.75% till Mar'21

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Originally Posted by N.A.GTC View Post
A fresh out of college graduate making, say, 4.8L per annum. Living with parents, so no expenses, the entirety is saved. Two years later, he can easily spend 8L on a car through legitimate, legal savings. Three years later, 12L.
That's not very improbable and happens often. I know many people who saved as much as they can (and could because they didn't have to spend anything as they lived with their parents), and splurged on a car they wanted.

It may not be financially prudent to buy a car at that stage - but that's besides the point; are we going to punish financially imprudent spends now?
TCS is only for cars with Ex-showroom above 10 lakhs. Moreover, as per the law, even if you are below the tax threshold but have any source of income, you are required to file a tax return, even if its a zero return.

However, there is one major reason behind this move, and that is to bring (to a small extent though) those people in the tax net who blatantly flaunt their money on the pretext that they are "farmers" and hence their income is exempt from tax. and this rule will soon be extended to real estate transactions above 1 crore, and any luxury good bought above XX lakhs, as per people in the know.

IMHO, about time!

Last edited by himanshugoswami : 23rd September 2021 at 10:00.
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Old 23rd September 2021, 13:22   #35
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Re: Not filed your IT returns? 5% TCS on new car!

IMHO 5% TCS is too less. In some of the posts above, people are justifying it as a wrong move based on some anecdotes like cars being bought by fresh college passouts, or buying car in the name of housewife, etc. But if you look at country level, then number of cars being sold every year is way too high when seen in context of income that the citizens are reporting.
https://twitter.com/BJP4India/status...28710892752896
https://www.thehindubusinessline.com...cle9446337.ece

Either the government should make all eligible citizens pay or completely abolish the income tax.
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Old 23rd September 2021, 15:09   #36
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Re: Not filed your IT returns? 5% TCS on new car!

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Originally Posted by matizcrazy View Post
As always, wild allegations and insinuations will be made against the lawmakers; also specific situations will be quoted in an attempt to establish the rule as being thoughtless.
This rule doesn't insist that you should keep filing IT returns, even if you are in the exempt category, merely to prevent TCS in future when you buy a new vehicle.
It only seeks that a person, who has enough money to buy a new vehicle, should keep a small sum with the Govt, just 5 pc, so that the Govt can get an idea where your money is coming from in the subsequent IT return that you will file, in order to claim a refund.
I don't see why anyone should have a problem unless he has no intention of paying taxes / filing returns / divulging his source of income to the Govt of India.
This is not EXTRA tax, by the way.
You have nailed it, brother. Paying taxes is the responsibility of the citizen and he must file returns yearly.
There will always be a bunch who assume a lofty position on these matters. They should take a glimpse at the US govt"s IRS tax laws and the implementation.
Sorry to see that you are banned. Hope to see your insightful posts soon Sir.
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Old 23rd September 2021, 15:39   #37
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Re: Not filed your IT returns? 5% TCS on new car!

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Originally Posted by ksaurabh21 View Post
IMHO 5% TCS is too less. In some of the posts above, people are justifying it as a wrong move based on some anecdotes like cars being bought by fresh college passouts, or buying car in the name of housewife, etc. But if you look at country level, then number of cars being sold every year is way too high when seen in context of income that the citizens are reporting.
https://twitter.com/BJP4India/status...28710892752896
https://www.thehindubusinessline.com...cle9446337.ece

Either the government should make all eligible citizens pay or completely abolish the income tax.
Looking at the datas from another perspective. 4.5 % people filed IT returns in 2020. But only 2.2% people in this country own a car.

https://economictimes.indiatimes.com...1.cms?from=mdr

https://www.team-bhp.com/forum/india...-citizens.html (It's official: India has just 22 cars / 1000 citizens)
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Last edited by anb : 23rd September 2021 at 15:40.
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Old 23rd September 2021, 18:10   #38
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Re: Not filed your IT returns? 5% TCS on new car!

Earlier, almost all buyers of cars above a certain threshold value used to routinely get notices from the Income Tax department to justify the source of income/savings, using which the purchase under reference was made.

Such a screening by the IT Deptt had many a time detected high value car buyers who had never filed their IT returns. But overall, the defaulters evaded detection. With the PAN card number now linked to Aadhar for IT return filings and the huge database with the very net savvy IT department, they should continue with sending IT notices to all motor vehicle buyers (incl bikes) fixing a new threshold value.

As regards dependents of income earners, its perfectly lawful to gift motor vehicles to children and other near and dear ones , but then there should be a reasonable justification about the source of the funds used by the income earning or high monetary worth parent/ guardian or donor who is funding the purchase for his or her kin or to some other person/entity.

The TCS formula of 1% and 5% presently seen here, that is being used by the IT department appears to overtly charge a compounding fee of 4% for non compliance, from those who have not submitted IT returns during the past two years. IT notices to buyers who have not filed returns will better serve their purpose. PAN number should be required for all high value purchases.

And one need not be presently a IT payer if he or she has good savings from the past either earned or inherited. Quite a few could be aged. Many of them survive on savings without paying IT as their incomes are below the IT limit. There are many elders who have good savings and live on bank interest/meagre pension within the IT limit and not subject to tax. If such a person buys a motor vehicle for his or her use or to give it as a gift to his or her kin, paying TCS of 4% is unjustified and absurd. Rather, if such a person gets a notice, he or she can justify the source of his or her wealth. I know cases where the ITO never wrote back ever, after proper justifications were sent by the concerned. Chartered Accountants are helpful in such cases.

Last edited by anjan_c2007 : 23rd September 2021 at 18:36.
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Old 23rd September 2021, 19:39   #39
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Re: Not filed your IT returns? 5% TCS on new car!

My Cousin recently booked Safari at 20 Lakhs Ex Showroom price on 18 September 2021 and got delivery on 20 September 2021. He was not even informed about the TCS part related to IT Returns. Only the 0.75% TCS for Ex Showroom greater than 10 lakhs was charged in the Invoice.

Off course being a salaried person he files IT Returns every year.
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Old 23rd September 2021, 20:06   #40
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Re: Not filed your IT returns? 5% TCS on new car!

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Looking at the datas from another perspective. 4.5 % people filed IT returns in 2020. But only 2.2% people in this country own a car.
You didn't imply it, but saying this for clarity. It is not a simple math that 4.5%-2.2% = 2.3% tax paying persons not owning cars. It's the intersection of these two groups that matter. Many tax paying people will not be buying new/any cars, and many new car buyers will not be tax filing persons.

Even if it happens that only 1% people who fall in the bracket of non-tax filing and new car buying group, still it is a huge number, 20% straight jump in tax filing persons (4.5% to 5.5%).
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Old 24th September 2021, 14:03   #41
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Re: Not filed your IT returns? 5% TCS on new car!

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Originally Posted by ani_meher View Post
Many tax paying people will not be buying new/any cars, and many new car buyers will not be tax filing persons.
Exactly. My parents have been paying taxes and filing returns since 1986, that too in the top bracket for the past 2 decades, but purchased their first new car only last year - 2020.
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Old 24th September 2021, 20:06   #42
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Re: Not filed your IT returns? 5% TCS on new car!

The representative at Nexa JP Nagar (Bangalore) insisted that to avoid 5% TCS slab, I need to submit the last 2 years' IT returns. This is a "rule".

Tried explaining that PAN should be enough for them to check, but gave up (not yet decided whether I will go with them yet, in any case).

He also insists that TCS is an added "cost" to me if I purchase a >10L car, and that I save that amount if I go for a lower model . Another item where they should know better.
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Old 24th September 2021, 20:36   #43
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Re: Not filed your IT returns? 5% TCS on new car!

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The representative at Nexa JP Nagar (Bangalore) insisted that to avoid 5% TCS slab, I need to submit the last 2 years' IT returns. This is a "rule".

Tried explaining that PAN should be enough for them to check, but gave up (not yet decided whether I will go with them yet, in any case).
It is clear that 2 years of IT returns must be submitted along with PAN. The dealership is right about this. They can't go checking whether you have filed IT returns for 2 years or not with just PAN.
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Old 24th September 2021, 21:19   #44
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Re: Not filed your IT returns? 5% TCS on new car!

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It is clear that 2 years of IT returns must be submitted along with PAN. The dealership is right about this. They can't go checking whether you have filed IT returns for 2 years or not with just PAN.

Can you share the notification from the govt which mentions that IT returns need to be submitted?

There is a whole system provided by the CBDT to check this. It accepts 10000 PANs in a shot. They can very well check there.

Ref: https://journal-beat.com/cbdt-issues...cs-compliance/
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Old 25th September 2021, 18:04   #45
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Re: TCS on sale of vehicles above Rs. 10 lakhs reduced to 0.75% till Mar'21

A very welcome move. The FinMin should offer at least 5% tax discount for those who can furnish consecutive tax returns for the last ten years

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Not filing IT returns is not equal to 'not paying taxes'. Just saying.
Agree. But why? If I can father a son, it's my responsibility to secure his birth certificate also.
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