Who doesn’t want to save money? Especially if you are going to buy a new car. People save money and buy new cars. But if you can save money on that car, you can save a lot of money. In fact, this blog will be very useful for you. You can save this blog and share it with your friends. Now you are buying a new car. You are saving money. You can see two papers in my hand. I was buying some documents.
I got an invoice for that car. I bought that car. You will be shocked to see the difference between the car we buy and the car we actually buy. Who is earning more money? Is it the government or the dealer? Who is earning more profit? Let’s understand. You can see this in the editor. There are two types of documents in my car.
I will show you the amount of the car. The amount of the car is 40,62, 782.I got a discount on this car. I got a discount of 4 lakhs on this car. So the value is 36,70, 888.This was the value of the car. But I don’t care about the car. I care about the car. Let’s see. On this, there is a GST of 28%. The battery of your car is 10,27, 849.After that, there is a 20% cess.
You can see the value of the car. My car has a value of 20%. In most cases, it will be of 22%.2% will be more. So the value of the car is 48%. In most cases, it is 50%. So the value is 7,34, 178.I am writing down the calculation. I am telling you this to show you something shocking. In this blog, I will tell you two ways. The first way is the legal way. It is called tax saving or tax planning. You will save money by saving tax in a legal way.
The second way is the tax evasion way. You can choose the way you want. I will tell you both ways. First, I will tell you the genuine way. There are no charges here. My car cost is 54,32, 915.But wait, this is not the final amount. This is the actual room price. We have calculated the actual room price. You know that the car is not available at the actual room. The car is available at the on-road price.
I will slide the chart here’s that I can show you the charges after this. Now let’s come to the second paper. I have calculated the actual room price. I have added road tax. I have to explain one thing to you. I have to tell you how you save money. And how people save money. I have paid the road tax.6,06, 792.I have a Haryana registration. I will tell you how the road tax is calculated. Insurance is compulsory. You will take insurance.
I have paid 18,362 for insurance. After this, I will come to the reimbursement. This is important. Tax collected at source. You have to pay this. But this amount I have given.54,32, 915.So this 54,32, 915.I have paid this advance tax. When I will file the income tax return. This amount will be cancelled. This is your advance tax. You are paying this now. But you had to pay this. This is 1% of the actual room.
You have to pay 1% of the actual room. After this, I will leave this small amount. There were some extra charges. I am removing i.e. am telling you how much additional I have paid. I have paid 9,18,000 more. After this, my car cost is 63,00, 000.
How much was the car? See here. This was the price of the car. The dealer had to give menthe car which was standing near the dealer. It was of 36,00, 000.And the calculation I have done.
Almost 63,5. I have given 63,5,00, 000.To the car which was standing near the dealer. The car which was standing near the dealer. They have put GST on it. Of 28%. Now, in every car, it is not 28%. Basically, it is categorized. If your car is above 1200cc.Then it is 28%. It comes in the luxury segment. If it is not in luxury, then it is 18%. So it depends. This is the GST. This is the compensation’s is the compensation. This is a different tax.
After this, you get the extra room. After this, road tax, insurance, and TCS. These are the basic elements. You pay for the past tax. You pay for the reimbursement and other small things. You pay for the add-ons. You get a lot of money. After this, you get the additional amount. Finally, you get the on-road price. This is the basic calculation of a car.
The shocking thing is that car worth 36 lakhs is worth 63 lakhs. You are almost shocked. This is almost double. Why is it double? Here you can see 48%. Generally, you will see 50%. So, 48-50%Government charges you on any luxury car. Government says that want the most money. So, no one is earning. Government is earning. This is the first thing.
State government has charged you road tax. This road tax differs. Now, I will tell you. First thing, which method do you want to know? The genuine method. I will tell you the method. It is illegal. People follow intuit starts from here. You can see that Road tax is charged for 6 lakhs. If the road tax is charged for 6 lakhs, the answer is yes, it can be less. I will give you a case study on this. How people evasion tax on cars. You can google road tax.
You will get to know about road tax. If we talk about Delhi, I will zoom in for you. So that you can see clearly. So, As I said, it depends on the car. It depends on CC. This is also about road tax. I was talking about Stiff your car is worth 10 lakhs and diesel, then 12.5%of road tax will be charged. People will ask, 12.5%What is the amount?
The showroom price of your car is 50 lakhs, 20 lakhs, 30 lakhs, anything is above 10 lakhs. You have to pay 12.5% of road tax. If my car is of Haryana, then in Haryana, on a car worth more than 20 lakhs, you will have to pay 10% of road tax. Of showroom price. If your car is worth 50 lakhs, then you will have to pay 5 lakhs of road tax.
Similarly, UP has 8%and Maharashtra has different. So, what is individual and unindividual? Basically, many people take car for business purpose. In the name of their company, in the name of their proprietorship firm. So, individual like Pushkar ashtra, Rahul has become individual. So, 7% on individual name. But if it is unindividual, like I said, if it is a firm, or a company, then 14% will be there.
So, 14% tax will be there. Now people want to save i.e. will definitely talk about it. There are many states where road tax is very low. Now I was telling you the way people save money. There are many people who live in Haryana, Delhi, but the car they have, it doesn’t matter, even if it’s number plate is of some other state.
You will see that it is HP’s number plate. I think they have shown a lot of intelligence that they have saved tax. Now let’s talk about how that tax is saved. Those people are not living in that state. For example, a person living in Haryana, he has registered his car for HP. You will say, how will it be without address proof?
What happens is that you will find many brokers in the market who will tell you that you have to get aren’t agreement from some other state where road tax is low. Now it doesn’t matter if you live there. On the basis of rent agreement, you will get an address proof and you can get your car registered.
Now when registration will be done, which state will be required for registration? It will be required for that state where you have shown your rent agreement, so if someone was going to give 12.5% in Delhi and he has given 6%for example, it took 5 lakhs and it was going to take 6 lakhs and half took 3 lakhs, so the saving of 3 lakhs was done straight away, but I am telling you this is not a legal way, I will tell you what is a legal way, but these people do it.
Now what do people do more than this, a very big scam was exposed, I will show you here, so you will google it, you will get to know about it, that now some people you will say that we have saved half and half. If for example call it Pondicherry and some call it Puducherry,
so if you simply google Pondicherry supercar scam, for example you can read this article by googling it easily, that what happened was that a political leader in Kerala used a supercar, used luxury car which was registered in Pondicherry,
so questions came from there that on whose name it is registered, after that Crime Branch had sent a notice to two actors, after that an actor was also arrested, he was asked that on which address you registered, why did you register, then it was found that those were fake addresses, that means such addresses do not exist,
it is like a tea stall and they say that this is the address and from there you registered that too of a supercar, so 15% means supercar means the car which is in crores, so youkan understand that if there is an extra value of 1 crore and you had to give a tax of 15% in any state, for example, where is the highest road tax, there is a question of general knowledge, so in Karnataka, the road tax is the highest, there is a road tax of18%,
for example, if he is in Karnataka and he has to save tax, then what he did, he registered his car in Pondicherry and he is driving the car comfortably in Karnataka, he is staying there, because there was a road tax of 18% and it is very less in Pondicherry,
so because itis very less, he saved a lot of money, in the same way, the supercars that were seen, it was found that in Kerala, there were more than 1000 such cars, here you can see, which were in Kerala, which were registered in Kerala in a similar manner,
now after that, the motor department there said that we need tax and a scam like this came out, but it is not that this thingies lost, still in India, people are registering their cars in such places to save road tax, where they are not even staying and making this rent agreement is not a big deal, so I have told you the first way that people follow,
so now you will understand one thing that road tax will be saved, now let’s come to the legal ways, what are the legal ways to save road tax, in fact, overall, how much tax can we save in this, let’s understand this, the first thing is if you are planning new car and it is EV and you live in Delhi, not Delhi, there are many states that are giving 100% exemption,
so this is legal, you do not have to give1 rupee in the name of road tax, there will be some small amount, I will show you that, so if we go to EV state wise, so here you can see, so in Maharashtra, you can see 100%road tax has exemption, similarly in Delhi, Gujarat, 50%, Assam, 100%, Bihar, 100%, West Bengal,100%, so you can check that where you will get 100% exemption on road tax, plus some subsidies are also given byte government,
so that it wants that the EV market is boosted, so now this government is giving you a benefit, so this is 100% legal, now here genuinely, if you are going to buy car, if you like EV, if you like the use of it, then you can save money, I am not convincing you that you have to do this or not, we are just looking for legal ways, with which we can save money,
now let’s come to the second way, this is one thing, now let’s talk about insurance, so in insurance, you see that a very large amount, like I paid Rest 1,80,000according to this calculation, if your car is more expensive or cheaper, then the amount of insurance will change, but let me tell you one thing, whenever you get insurance,
so you always see that your showroom will focus that take insurance from us, take insurance from us, why take from us, because there is a good margin in insurance, I will tell you that 15-20% margin is saved, if any dealer will do insurance, then 15-20% margin is saved, now because the margin is saved, then he wants that in this 15-20%,how much is the 20%of Rest 1,80,000, almost Rest 36,000, Rest 36,000 has to come in his pocket,
he will show you that he will take Rest 1,80,000 and he will get a commission from the company, which is not wrong, but if you become a little smart and you just tell him, even if you don’t have any insurance agent, then you can tell the dealer that this amount is too much for me, then he will say what, you tell him that I have an agent, heist offering me a good deal,
he will say which offer is he offering, you can say that thesis your choice, this is the negotiation part of the thing, so if you tell him, then he will give you 20% less, what will be the reason, he will see that I will earn next year, next year renewal will also come and whatever motor insurance is, it is always a fresh policy, it means that the percentage that is coming here every time, the dealer gets the same,
so if there is margin of 15% and 20% then every year 20% will come in his pocket, so if you make a policy, then these are some things, I am just telling you, I told youths, you had to apply twists and when you will file this text, then according to that you can adjust yourself, in fact you can also take a reimbursement,
now let’s come forward, now you were giving very big amount, this in the name of GST and this in the name of CES, can anything happen to it, something can happen in exceptional circumstances, now what are those exceptional circumstances, I will tell you, forget this CES, either you will give 20% or 20%, you will not get anything for this, this money will definitely be taken by the government if CES is applied,
then why does the government apply CES, Cassis applied to make things more luxurious and more unaffordable, the government knows that amen is going to buy a luxury car, he is going for luxury, so he is spending money in the name of luxury, now we will also take money in the name of luxury, so to make things more expensive, CES is applied on it,
so here to make it more expensive, but the things in which you are getting subsidies, you will see that generally you will not see CES, so this you will have to give in luxury car, in the case of EV, you can check whether it is applicable or not, so if your car Isa diesel car, in the luxury car segment, CES will be applied and nothing will happen tout,
let’s move forward, how will GST be saved, so GST is basically not saved, in most cases, but in some cases, you can get the benefit of GST, the 28% you paid, you pay 18%, youkan claim this when you are going to use the car you have bought to give some service, for example, you park this car in your hotel, you have a hotel, you park it in someone’s hotel and from there you bring the passengers and do the work of going,
so in those cases what happens, you are giving service, now you will take tax on the earnings by giving service, that too 18% or whatever your tax will be, so now you had to give tax to the person, for example, your tax became 20 lakh rupees for a month and what you see, you purchased a car in the same month and you gave GST of 10 lakh rupees on that car
, so now you have to give 10 lakh rupees instead of 20 lakh rupees, that will be adjusted, for example, you have a driving school, so there is the same service thing, if you have a driving school, then what are you doing, you are buying a car and teaching people to drive, so if you use that car for some service, for Ola, Uber, anyway,
so if you use it for some service, then you can get the benefit of GST, you can get the input credit, so you get the credit and it is adjusted in your tax, so this comes under an exceptional circumstance because there are exceptional businesses, but if you are doing a normal business, then what will happen, now like I am doing a normal business,
so if you are doing a normal business, you are self-employed, you have a business, in which you use your car to go to office, for meetings, for business purpose, so now what will you get the benefit, what did you pay on the overall car, so I will show you here,
for example, the circumstance that I had, in that I paid this amount, 63 lakhs 51 thousand rupees, now the amount that I paid, now thesis my expense in a way, now I must have had some income of that year, for example, let’s assume that the amount that I paid, for example, I had the same income, so this was my income, this is an example, you will definitely have more or less, but am taking an example, this was the income,
now on this income, tax will be imposed, so I have taken two examples here, one is the person whose income is above 10 lakhs, if your income is above 10 lakhs, then you will get 30% tax, plus, you will get CES, surcharge, you must have heard, educational access, if you see your ITR, you will get to know, so whatever income you pay tax on, depending on which category you come, what is your slab, so you get surcharge or some addition, so it is always above 30%, 31, 32%,
you will see, depending on how much your income is, if your income is more, then it will increase, show will it increase, if your income is above 5 crores, then you will get a tax of 42%,so now you will say that the tax of 42% is above 5 crores,
we are talking about ordinary people, basically we are talking about luxury cars, these are the people who will buy, whose incomes more, then they buy luxury cars, whose income is limited,
they buy normal cars, and whose income is very less, less than 10 lakhs, then they do not buy cars, so if you are reading the blog on cars, then I am explaining all these circumstances, so here if you see, you’re tax will be on this income, so if your tax, all the benefits you get from the government, you say that you do not have to pay tax on the income of 5 lakhs,
I have removed all that, I have removed it, I am assuming that you have to pay tax of31%, so whatever tax you had to pay of 30% or 31%, that will be about this much, of this amount, from 19 lakhs only you will be getting, but still you have to pay, be causers. 68000 something will come; you have to pay this.
Now you will say that it will be saved completely, the answer is no. What happens is that you get depreciation on the car you your income is three lakhs. Buy and you get depreciation of 15% and this 15% every year. You how it will be. So, here we see for calculation, I have written mean, I will explain tithe amount, if I subtract 15%from it, then this Rest.
9 lakhs will be deducted from the first year and the return down values WDV, so it will be Rest. 53,98,000 for the first year. So, in the first year itself, my car got depreciated, but when are you getting the benefit? When you use your vehicle for any business purpose. Now definitely you have a business, you have to go for meetings, you have to go to the office, so it counts in business purpose.
If you take your wife for a ride on Saturday and Sunday, then there is no problem. If it is your business and you are using your car for business purpose, then you get depreciation claim. I have explained this point to you, which is very important. Now I will tell you, you will say, if we do job, then this is the biggest loophole of finance, which many people do not understand, but we can do something in this.
If you have a genuine job, then what happens is that whatever income you get, you cannot claim expenses from it. I will explain to you what is a defer. You get income, you get salary, you have to pay the full taxon that salary, you cannot do anything and after that you do your expenses.
If you are doing job, but if you are doing business or you are self-employed or you are a freelancer, in this case, when you get income or you are trading, that also comes in business income, then whatever income you get, first of all, you reduce your expenses.
What will be your expenses? For example, Igor to office by car, then I have a business meeting, I have To go to Bombay from Delhi, now I have to go by business class flight, I have to go by ticket, now whatever will be there, that will be my expense. If I bought a mobile or bought laptop, I do any business work, I do a meeting, I do a Zoom call, that will be considered in my expense and when it will be considered in my expense, what will be left after that, what is left over, I have to pay tax on that.
So in the job, you have nothing, you cannot claim expenses, in this way, its calculation is completely different. So here you have to pay tax first, if someone has a lot of salary in the job, then you will see that very little is left in his hand because tax is charged and there are many other deductions
, so we are not talking about those, we are basically explaining that if you are a self-employed or you have a business, then you get the benefit of expense on income and then you have to pay tax, whatever is left over. Now, the things I have explained to you, I have explained to you that how youkan legally save on the way you are buying a car, how you can take the benefit of depreciation, then I also told you about road tax and I have also explained this to you.
Now I would like to tell you that if you buy a mobile or you buy a laptop, here in exceptional cases, you were getting the benefit of GST when I told you that you are a dealer or you are using your car for some service or you are running a driving school, then you were getting the benefit of GST of 28%, but if you buy something else, like you buy electronics,
now suppose I am recording in a studio, I have put AC here, I have 28% GST on AC, but now people think like this, when I made a blog, I told you how you can basically save, so people thought that if I bought AC at 28%, then I have to sell AC only
, it is not required, what is required is what is your end product, I have put AC in studio because I can make good blog, I bought a camera, I got GST on that too, I bought mobile, I got GST that too, I bought a laptop, I got GST on that too, so on all these things, I am writing on this board, I got GST on this too, but I am not selling this board, through this board, we are making a blog, now assume that YouTube gives me some money,
so if I get some money, that is my income, now on YouTube’s income, if you are in export of services, then you get the exemption of GST, in the same way, I am giving some other service, so if I give any service, let’s say I do a promotion of a product, I do a promotion of an iPhone, now in case of iPhone promotion, what will happen, this iPhone got a promotion, now Apple gave me some money,
I will charge GST on that, but now I have got the input of GST from all these things, input, I have got it from all these things, what will happen next, if for example, I charged 1 lakh rupees, this is an example, and I took GST of 18%of my income, so I have to pay GST of 18000, but I have got more input, so I will not have to pay GST,
this GST will be saved, this money will be saved, so you have to understand these things, which you can understand, you can apply in your business, if you are working for a company, then rather than saying that you give me a salary every month, every fixed, you can raise the invoice, if you are doing freelancing,
so that you can show yourself as a self-employed, but there is a loss of this too, if you are doing a job, then you get a loan very easily, so there you do not have much headache, you have to explain in self-employed, because the bank feels that he is getting money this month, if he does not get money next month,
but if you are getting salary every month in the job, then it becomes easy for you to get a loan, which was the main topic, that how will you save money one car purchase, here I told you that the value of the car is very low, but on that GST is high, then road tax is high, I told you a lot of things,
how can you save road tax, I told you that, how people are saving, I told you that, in what circumstances will you get GST, and finally how will you get the benefit of depreciation, and you can talk to your charted accountant, they will be able to give you better advice, because they have more experience, so definitely you can talk to your financial expert or advisor or charted accountant.