Team-BHP - P Chidambaram is letting me buy the car now.

I am planning a new car this year. I wanted to buy it around March and that too via company. That way it would save me a bundle on tax, atleast that was the plan. However, my accountant asked me to wait until the taxes are filed for this year. Since my company is new and has not filed taxes for the first year of operation, it would qualify for loans after taxes are filed for year 2004-05. This meant I can't buy until June.

Couple of days back when P.Chidambaram unleashed his new budget, he destroyed all these tax saving plans in one stroke. Since fringe benefits (car/fuel/maintenence/driver) will be taxed from now on, it doesn't make a difference whether I buy the car in my name or company name. This means I can buy the new car right now.
Of course, paying after-tax money.

Just last week I was lecturing Rudra Sen about the tax benefits of buying through the company. I can hear him laughing now.

Rudra Sen: rl:
Me: :mad:

So, if the fringe benefit tax gets passed, I'll be buying the Fiat Petra right this month.

BTW, with this bitter-sweet news I complete 100 posts to become a BHPian

Quote:

Originally Posted by Jaggu

hey samurai.. good choice on the car, and u can get back to one mr rudra by asking him to disclose his contacts at tvs bangalore :))

though u will have to wait till weekend for him to land back in bangalore..

Aha! I was hoping to meet him soon anyway. I'll see whether I can manage it this weekend.

BTW, how come I am still shown as Newbie, I thought 100 posts will promote me to BHPian. :confused:

Quote:

Originally Posted by Samurai

Since fringe benefits (car/fuel/maintenence/driver) will be taxed from now on, it doesn't make a difference whether I buy the car in my name or company name.

On the tax benefit point of view, please wait for some more time before you jump into a conclusion, as the these monthly benefits play an important role in tax savings. Things are unsettled. May be it will settle down in a week's time.

I feel this new tax on so called fringe benefits will be recalled soon. It just does not make sense! I mean, if a person has to travel on business, it is not a benefit so why the hell should it be taxed.

At first sight, the budget looked good, but the more I read, the worse it seems to get. Tax on cash withdrawals, tax on fuel, tax on friggin EVERYTHING! Seem's like this Govt. is out to squeeze every last penny from us. Where it all goes is anyone's guess.

Quote:

Originally Posted by Rtech

Tax on cash withdrawals

Even this would be called off, I guess. This has lot of impacts even to the banking sectors. People will surely mind on the amount that was taxed, prefer to keep it in residence, creating more opportunity for increasing the crime rate in the country.

Of course, I'll wait until the dust settles. However I don't believe much will change on this front. Chiddu has done some crazy proposals as of now. For example, all business travel expense (Flight/Hotel/Food) by employees will be taxed, advertising expense by the company will be taxed, fringe benefits will be taxed, etc. Also he appears to be giving much more discretionary powers to IT officials. It will be up to the local IT official to decide whether an expense is a perk or a real expense. May lead to bribes though.

I think he has proposed many items that he wants in the budget along with some crazy items that he doen't mind removing. He starts with a shock to the system with the crazy proposals which draw everybody's attention, and then withdraw them to appease everybody. Meanwhile items like fringe bebefit taxes passes without much notice. Y'know, like a magician, create a diversion the the crazy items while he pushes his other items through.

The way this is handled is frustrating. They can put it flat. But what to do, politics plays a big role. They need to convince everything to everyone. Hence beating around bushes, confusing people before implementing the intended ( the right one or the wrong one)

[quote=Samurai] Just last week I was lecturing Rudra Sen about the tax benefits of buying through the company. I can hear him laughing now.QUOTE]

I'm not laughing Samurai but I'm truly worried.
I firmly believe along with everybdody here..Petra,one of the true great car..
But sadly that's not the case when it comes to own one. Company and their dealers..I really don't know how to label them.

But if you're going for Petra, suggest get in touch with Anoop for RAC.
Ranjit(RAC) will give you much better service than Sundaram.

Surprise surprise, Sundaram is pretty different with their other offerings.

Quote:

Originally Posted by Rudra Sen

Surprise surprise, Sundaram is pretty different with their other offerings.

That is really bad. Why does Fiat not take note of dealers that are doing the marque and the product a great disservice?

Hey type1,
i agree with you completely..
Even fortpoint is as bad if not worse.
Hey samurai,
I am waiting to hear about any changes in the taxes as all our cars are company cars and if they are going to tax it, i will make sure that my next car is in msomeone in my familys name.
It will be cheaper.

The latest thing I heard was that you can still buy the car through the company (using before tax income) since it is considered an asset. The expenses on the car like driver, petrol, service will be considered fringe benefits and will be taxed.

In other words, I can't buy the car before May when my company taxes will be filed. :Frustrati

samurai -

sad about the delay - in your last posts, i could almost sense your pulse racing at the thought of your petra purchase...

yeah the new budget sucks - can you imagine - all high end products cars, plasma t.vs, and other imported items have actually become cheaper -

while the middle class / small scale bizman/manufacturer (me) gets stuck with higher import duties on steel, higher petrol prices etc.

that goddamn pcc has truly forgotten his roots - lip service i say, big talk and no go...

and this ones for you and the rest of us sufferers... :Frustrati