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-   -   Not filed your IT returns? 5% TCS on new car! (https://www.team-bhp.com/forum/indian-car-scene/242185-not-filed-your-returns-5-tcs-new-car.html)

My brother in law in Hyderabad got this price list for Compass.

Can someone tell me what is this 5% TCS which is apart from 1% that I know of.(.75%) now. If you see at the bottom, it talks about specified category.

Don't think that 5% is valid. Am I missing something here?

Your answer is here :
https://taxguru.in/income-tax/specif...ab-206cca.html

and

here

BMW pricing in Bangalore with the updated 5% TCS slab, for people who haven't filed IT returns in the previous two years.

They should increase the TDS on those who haven't filed returns to 30% or more. There is no reason folks should be allowed to buy new luxury cars or any cars for that matter without filing for IT returns. Let the tax evaders at least be forced to buy used cars.

Not filing IT returns is not equal to 'not paying taxes'. Just saying.

Cheers,

Jay

Thanks for sharing, raaj.bhalla! Moving your post out to a new thread so as to inform others. A new thread means 100X the views & 100X the visibility in search engines, including Google. Will add to homepage later this week :thumbs up.

@ BHPians, if you should spot any good post in an existing thread that deserves its own new thread, please report the post and we'll move it out for greater visibility.

Thank you!

Point accepted, but that's still not an excuse to not file returns. To support this country, and as a responsible citizen, you must file your returns every year. On time.

So. My Brother in law was not informed of this and this was directly added in the final cost. When he told the dealer that it is not applicable to him as he has been filing tax return every year, they removed it. Ideally, dealers should inform this to uninformed customers. My brother in law was not aware about the TCS (even the 1%) thing and he could have easily paid 5% had he not checked with me.

Noted, but why would someone do it?

If paying taxes but not filing returns then it is silly mistake.
If not paying taxes and not filing returns then its is a crime.

In both the cases buyer deserves the penalty of 5% TCS.

If one comes under below 5 lakh income, who are not required to file returns, then they can hardly be in position to buy a new car.

Can you capture other scenarios?

It's a brilliant move. Next, there should be differential tax for other big ticket transactions like property registration rates etc. Something that honest tax payers should feel good about

My dad who was on the look out for anew car was informed by both Renault and Kia dealers when we had gone for test drives. AFAIK, this rule came into effect sometime in July. It was discussed briefly in the new car price track thread too.

Its a great move. I would be happy if they increase it even further. I cant think if any instance where someone with taxable income below 5 lacs can afford a car above 10 lacs.

But how are the dealers enforcing it? Do we need to submit the ITR as well at the time of booking/delivery? Or just take the word of the customer?

Agree :thumbs up.

A simple 10 second look at the proforma invoice would have shown a huge sum as TCS. In fact, the 4% increase will make the dealership lose potential buyers. Generally, the compliance norm are "guilty unless proven innocent", hence their system probably generated the 'worst' case initially.

I'm also mystified why someone would do this. These days, any high value or notified transactions done quoting a PAN is anyway sucked up into the OLTASS system, which will automatically generated intimations to 'potential' assessees.

5% TCS is going to be fine for salaried individuals who are buying a personal vehicles. What we are forgetting is the fact that many transporters will now have to bear this additional 5% amount even if they have IT return, as they might pay aggregate TCS / TDS over Rs.50,000.

- from post #2.

Now, those whose vehicles have been enrolled in fleet or are also dealing with e-commerce companies, anyways pay TDS @1% under section 194(O) which is not under expedition for this.

So, this 5% is a big amount that gets locked up for upto a year with no interest. :Frustrati

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?

Wouldnt most of the fleet vehicles be below the 10 lacs threshold unless its an Innova. Also, these would be registered under the company name which means the company should be ITR compliant.

I agree there would be an odd instance of some company which is not doing well and has to park the money in tax, but overall its a good move especially for the luxury car sales.

This TCS is applicable to not just new cars but all motor vehicles. So even trucks will come under this purview.