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Depreciation Slabs on Cars Increased, BS4 Vehicles will run for 15 Years

Depreciation Slabs on Cars Increased, BS4 Vehicles will run for 15 Years

Finance Ministry increased Depreciation on Cars to 30% in a Financial Year along with assurance of Registration Validity of BS4 Cars, deferring Registration Fees Hike

 

Finance Ministry attempt to Revive Passenger Car Sector

Ms Nirmala Sitharaman (Finance Minister) announced some measures to boost Passenger Car Sales

  • Biggest of all is Increase in Depreciation Slab from existing 15% to 30%. For all Cars bought from now onwards till 31st March 2020 - depreciation of 30% can be claimed by Business. Do note that Salaried have no benefits on Depreciation, its a measure which will benefit Self Employed Business to claim additional depreciation on buying car from August 24, 2019 to March 2020 as additional Depreciation 
  • Uncertainly cleared from BS4 Vehicles, where Finance Minister assured that BS4 vehicles will be allowed to be driven for there entire Validity as mentioned in Registration Certificate. 
  • A Hike on Registration Fees was Proposed Earlier, which is been deferred till June 2020
  • Ban Lifted from Government Department to buy Cars
  • Even Modalities on Scrapping of Old Car is under consideration and will soon be rolled out

All these Steps are definite in Positive Direction. The only other demand from Auto Sector is however been left out where the objective was to reduce GST from 28% to 18%.

Had this demand could have also met, it could have fuelled in growth been the prices could have come down drastically. But, somehow the GST remains unchanged

 

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What Implication does New Policy on Buying Car

So, if you plan for a New Car even by March 2020, you can claim in 30% as Depreciation. Been Depreciation is a Non Cash Expense. Even if one buy car worth Rs 10 Lakh on Loan even in March - Rs 3 Lakh straight away as deduction would be allowed on to it (which earlier was of Rs 1.5 Lakh)

This will definite help in reducing Tax Liability to a a substantial extent. Also, the assurance of Validity on Old BS4 Cars is again in Positive Direction

Deferring in Proposed Hike of Registration is a welcome step as else it could have further made Car Buying Expensive

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Comments 3

Guest - Vinod on Thursday, 29 August 2019 15:08

If I purchase a car in november will I get 22.5% depreciation or how much?

Please clarify

If I purchase a car in november will I get 22.5% depreciation or how much? Please clarify
Guest - Maninder on Sunday, 25 August 2019 11:03

Sir wat about diesel car if we purchase bs4 car it can be run till it's registration validity date or its can be run for 10 yrs.

Sir wat about diesel car if we purchase bs4 car it can be run till it's registration validity date or its can be run for 10 yrs.
Guest - Himanshu Saini on Saturday, 24 August 2019 04:56

Sir, hope you are doing good. I want a powerful engine SUV. But I am confused. Seltos 1.4 DCT looks good but not sure about it's reliability. Also it's build quality looked below average to me. Harrier is very fancy from both inside and outside but people are already facing reliability issues. Compass is a strong product but not sure how good Jeep's after sales service.

Please suggest.
Thanks,
Himanshu Saini

Sir, hope you are doing good. I want a powerful engine SUV. But I am confused. Seltos 1.4 DCT looks good but not sure about it's reliability. Also it's build quality looked below average to me. Harrier is very fancy from both inside and outside but people are already facing reliability issues. Compass is a strong product but not sure how good Jeep's after sales service. Please suggest. Thanks, Himanshu Saini
Guest
Friday, 20 September 2019

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