There are numerous legitimate methods to save lakhs in taxes on expensive and luxury vehicles and some of these methods are mentioned in this post.
A financial expert explains how one could save around Rs 15 lakh on a vehicle that costs as much as a Toyota Fortuner. Fortuner has been a famed premium 7-seat SUV in our market for years now. After the departure of its arch-nemesis, Ford Endeavour, the Japanese carmaker has introduced myriad new variants of it stretching the ex-showroom price of the top trim to over Rs 50 lakh. Hence, one could deploy some clever ways to save a large chunk of tax if one decides to buy a vehicle around this price point.
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Financial Expert Shows How To Save Tax on Toyota Fortuner
This video has been uploaded by Pushkar Raj Thakur: Business Coach on YouTube. He is among the biggest YouTubers in the country with over 8.18 million subscribers. In this video, he breaks down the on-road price of a luxury vehicle. There is 28% GST on luxury cars and 20% Cess. In addition to that, the car buyer needs to pay Road Tax, Insurance, TCS and other expenses that could almost double the ex-showroom price. Hence, a few tips to save some of this amount could help a lot.
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First of all, you could save some money on the insurance premium by not taking the one being offered by the dealership. The dealership has its own commission in the premium amount. Secondly, people also register their cars in other states where the road tax component is lower. However, this might not be entirely legitimate if you are not residing in that state. But the biggest component of the on-road price is GST at around 28%.
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15% Tax Benefit in Depreciation
If you use your vehicle for business purposes, or if you are self-employed or a freelancer, you could show that the vehicle is needed to conduct your business or offer services like driving school. Therefore, in such cases, you could get back the GST component as a credit which can be adjusted against the tax that you are liable to pay while filing ITR on your salary. In this way, a large part of the on-road price can be saved. In addition to that, you get 15% as the depreciation of the car as a tax benefit each year. Hence, one could save a lot of money on premium cars by adopting proper tax laws.
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