Is it possible to save tax by buying car for salaried pe

Hi Abhishek

          U cant clain Deperciation for ur New Car. Car can be deperciated only when ur using it in a business or in ur profession. So Salaried person cant claim Depreciation.

          To avoid tax u can invest in Mutual Funds, NSC, Infrastructure Bonds, 5-Yr bank fixed deposits, 5-Yr post office time deposit, NABARD rural bonds etc but invest in those after consulting an Auditor for ur betterment.

Thanks

R Shriram

Thanks Shriram, but i want to save tax apart from 80CC deduction, so is there any way to show a business along with salary to save tax by buying a car.

Originally posted by : abhishek
	Thanks Shriram, but i want to save tax apart from 80CC deduction, so is there any way to show a business along with salary to save tax by buying a car.

Yes Mr. Abhishek you create a business say xx investments & explain its scope as investment in bonds, shares & deposits so on and so of. Against this business purchase a car & claim 15% Depn per annum as expenses and can reduce tax.

Provided change all investments to the entities name which will make ur idea so clear.

Thanks & Regards

Ram.

u can show rental of car, from which u can claim depriciation / maintainance of car/ driver expenses/ interest on loan taken for car ( if any) but remember not to exceed 10L otherwise u will face music of service tax.

Thanks Mr US Sharma, can you please explain me a bit more, do u mean that I need to show a business along with job to use benefit of depriciation, and will I need to transfer investments in the name of business, because this will be a bit difficult thing.

And I want to go by way that is not too risky, but too want to save tax, as have to pay tax from my interest income.

Thanks

is it that i can just show car is for purpose of renting, but no profit, then only i will be able to show loss and save on taxes. Though I can buy car by direct payment, so what will be more beneficial taking loan or direct payment if I am using this option.

As I came to know that one can show any business loss and save from tax incase you have ineterest income. - Is this right?

usually car is personal effect in perasonal hands, and no depriciation or interest benefit is available to individual assesee, 

as u have asked to avail the depriciation, so i have pointed out the suitable way to get this, 

any business is done for cash profit, but with book adjustments like depriciation, interest burden, the effect get converted to loss sometimes. whereas we can not say that we have done business for NO PROFIT.

but if you are opting for business loss, then i regret to comment further on this issue. 

Abhishek,

there is no way you can claim depreciation.  If you show it in business, than you have to pay 33.66% of IT on that amount for that business and depreciation of 10% for your car.
 So think wisely what is benefit for you. Only for depreciation you cannot open a new company.

Also you have mentioned that you want to have deduction other than 80C. so go for HRA also if not calculated for salary.

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