quary for car purchase.

Originally posted by : brijesh
	Hi. If a person has cash on hand to purchase a car then should he purchase a car for cash or should invest the amount and get returns. The person is business person and is already having income exceeding tax limits. Please give your views.

purchase the car in business name, avail depreciation benefit to reduce the tax liability, avail car maintanance ( fuel etc), 

in personal hands, car is an effect, and no such benefits are available for assessee.

DEAR BRIJESH

AS FAR AS YOUR QUESTION IS CONCERNED , IT DEPENDS ON THE RATE OF RETURN YOU ARE GETTING FROM INVESTMENT AS WELL AS RATE OF INTEREST  ON LOAN  FOR THE CAR. GENERALLY THE RATE OF INTEREST ON CARS ARE LOWER THAN PERSONAL LOANS . SO I WILL SUGGEST YOU TO INVEST THE MONEY AND GET RETURNS AND PURCHASE THE CAR ON LOAN IN THE NAME OF THE FIRM SO THAT U CAN CLAIM DEPRECIATION AS WELL AS OTHER MAINTAINENCE COST ALONG WITH INTEREST ON LOAN .

depends on ur requirement too.....what purpose u wanna use the car for? What rate of interest are u getting.....??