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Car purchase by cash payment

21288 views 9 replies
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27 Points Posted on 26 June 2021
Sir/Madam,

One of my friend going to buy a second-hand ed car , cost of around 18laks by full cash payment.

Can he buy ? He's been filing his IT returns from 4 years.

kindly suggest me
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On 26 June 2021 at 07:33 Report
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Quick Summary
Cash purchase of a car above Rs 2 lakh is restricted under income tax rules. Such transactions may attract penalties. Payment should be made through banking channels to ensure compliance, even if seller agrees to accept cash.

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Tax consultant
552 Points Posted on 26 June 2021
Seller won't accept cash more than 2 lakhs.
2 Reply
On 26 June 2021 at 08:34
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210 Points Posted on 26 June 2021
Legally, you cannot do a cash transaction of more than ₹2 lakhs in a day. Unofficially, you can purchase the car on full cash. There are many dealers especially in states where laws are tax, who have no problems in cash transactions above ₹2 lakhs and people are buying cars on full cash payments from those dealers.
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On 26 June 2021 at 08:48
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Chartered Accountant
24588 Points Posted on 26 June 2021
It would violate section 40 of IT Act. Pay through cheque
129 Reply
On 26 June 2021 at 09:20
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tax consultant
3306 Points Posted on 26 June 2021
Is he going to use the car for business or for personal purpose
9 Reply
On 26 June 2021 at 09:24
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403 Points Posted on 26 June 2021
Please give more details of background of seller, buyer and purpose of car to be used
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On 26 June 2021 at 10:29
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27 Points Posted on 26 June 2021
Thank you so much for clarifying my doubts .

He is going to use for his personal purpose, even seller has agreed to receive cash payment rather than cheque .
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On 26 June 2021 at 10:34
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3134 Points Posted on 01 July 2021

so much cash payment cannot be made in a day?

3 Reply
On 01 July 2021 at 11:20
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Chartered Accountant
24588 Points Posted on 18 July 2021
10k rupees should be paid in cash in a single day
129 Reply
On 18 July 2021 at 20:21
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2 Points Posted on 15 December 2024

YOU EDOT

 

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On 15 December 2024 at 14:57


CCI Pro

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