Car purchase in Partnership firm's name

Hi, 

I have a partnership firm (not LLP) in Bangalore with me and my spouse as the two partners. We plan to purchase a car (say for 15 lakhs) under the firm's name.

Now, the firm's account has around 5 lakhs. We do not intend to take a car loan. Can each partner loan 5 lakhs (total 10 lakhs) to the firm and ensure the car is purchased under it's name so that we can show that as an asset and benefit from depreciation, insurance, maintenance costs etc? 

Also, how much tax can be saved from the business profits (including car purchases, depreciation, etc) if the above holds good? 

Please advise. 

 

Replies (3)
Quick Summary
This discussion explores the feasibility of purchasing a car under a partnership firm's name, rather than in individual partners' names. The partners propose loaning funds to the firm to cover the car's cost, enabling the firm to claim it as an asset and benefit from depreciation, insurance, and maintenance expenses. The conversation also touches upon potential tax savings on existing profits and future earnings through loan repayments.

Yes. above transactions can be done. This is within the laws.

Yes, You can show the car as asset in the firm and Claim depreciation. Also You can book expenses like Insurance, Maintenance and Fuel...

Thanks for the responses.

Do we also get to save 30% tax on the existing 5 lakhs currently in the firm's account (these are the profits earned this year) from the above car purchase? Also, can future profits upto 15 lakhs be made tax free as that can be shown as loan repayment to the partners? 

Newbie here, so please excuse if the questions are silly. 

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 08 October 2026
ARTICLE TRAINEE

S.B.G. & CO. CHARTERED ACCOUNTANTS

New Delhi

CA Inter

View Details
Company
ARTICLESHIP 16 September 2026
Article Assistant

MANUJ SHARMA AND COMPANY

Noida

CA Inter

View Details
Company
Featured 03 October 2026
Accountant

A P Lodha and Associates

Jalna

B.Com

View Details
Company
19 September 2026
CA/Semi-CA/BCom

Pravin Sarvaiya

Mumbai

CA Inter

View Details
Company
30 September 2026
Senior Accounts Executive

Codeboard Technology

Chennai

MBA

View Details
Company
18 September 2026
Accounts & Finance Specialist

ULTRA CHEMICAL WORKS

Thane

CA Final

View Details
Company
09 September 2026
Chartered Accountant

Aviv Global Private Limited

Ahmedabad

CA

View Details
Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details