Purchasing a car in cash

I dont think there will be any tax implication. He can show it as cash gift from his brother. 

There will be no tax implication in case person take cash gift from his relative and brother falls under definition of relative.

Originally posted by : Gagan Deep Singh
	I dont think there will be any tax implication. He can show it as cash gift from his brother.  There will be no tax implication in case person take cash gift from his relative and brother falls under definition of relative.

Agreed. You can buy entire Fixed Asset in cash. Gift from brother is not subject to tax

no one will accept cash more than 20000....any purchase of movable property exceeding the limite specified will be reported in AIR...

Dear Nikita

As for your friend's brother, gifting to your friend would only be an application of income and he would have already suffered tax in his resident country. As for your friend, as pointed out, it would be a gift and being a "relative" as defined for this purpose, it would be exempt from taxation.

Documents relating to "purchase of a motor vehicle which requires registartion by a registering authority" is one of the transaction which mandatorily requires mentioning of your PAN.

Further as per Rule 114E, Cash deposits aggre­gating to ten lakh rupees or more in a year in any savings account of a person maintained in that bank is one of the group of transaction required by the banks to be reported in their AIR reporitng. So here, as per my knowlegde this transaction won't fall under this.

Also, though you mentioned so in the heading, I hope you do not intend to pay in "cash" being a material amount. Let your friend's brother transfer from his bank account to your friend's bank account and thereafter, he can make the payemnt to the selling car dealer.

Note that the remittance from the NR brother to your friend may be compliant with FEMA. 

Regards

Ajay