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Cash purchase

Joshua Dsouza (152 Points)

29 March 2019

Tax implications on purchase of vehicle on full cash

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4 Replies

Sahil Jain (FAFD, DISA, CA) (Practicing Chartered Accountant ) (2476 Points)
Replied 29 March 2019

cost of acquisition shall be reduced by the amount paid in cash. in your case full cash payment, hence cost of acquisition shall be 0

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CA Naveen Chand (Chartered Accountant) (12729 Points)
Replied 29 March 2019

CASH TRANSACTION OF MORE THAN RS 10,000 IS NOT ALLOWED

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Mayur Patil (Article) (1276 Points)
Replied 30 March 2019

Violation of 40a(3)

Connect with 43b actual payment
Actual payment reduce by amount paid in cash

And connect with sec 32 depreciation
Depreciation should be calculate on actual cost

So depreciation will be NIL.

2 Like

RAMAKRISHNAN R (INCOME TAX OFFICER) (1736 Points)
Replied 30 March 2019

if the vehicle is purchased for your business purposes, then as per section 43, cash payment in excess of 10000 will be reduced from the cost of assets and no depreciation will be allowed. if it's for personal use, then there's no tax implications however the seller will have to face penal provisions under 271DA for violating the provisions of section 269st

3 Like