TaxTMI 
TaxTMI 
TaxTMI 
Decided to buy a car, have you finalize the payment conditions?
That would be the tricky one, as far as income tax is the concern.
Now you are wondering:
Buyer is me, the seller is car dealer- why income tax is bothered.
In the article, you will get all your answers.
Buying a car with 100% cash payment attract income tax department.
This is true.
It raises a question to the income tax department about the source of money.
Points to remember while buying a car in cash
Logically, it is true when you buy a car in cash, definitely raise a question:
Where have you got the money from?
If you are an employee or a small shopkeeper.
- Before going to buy a car remember, do you have filled your income tax return or not.
- If you are a genuine taxpayer, are you preparing your books of accounts?
- Last, is there surplus cash available in your books.
I am talking about the account of books:
Yes.
You are wondering if you are individual a salaried employee, why books 'I am not running a business'
A good question.
This example will explain it in details:
'If you are in possession of $ 1000, (for that you have already paid taxes), you pay your rent $ 200, pay for your grocery $ 100, entertainment and fuel $ 200 and finally some of the miscellaneous expenditure $ 250.
Now you have left with $ 250, that would be your saving:
Or, you can saw you can use the balance money later.
Now:
If this principle repeats for 4 months in a row:
You have $ 1000 in your hand.
Now if you send whole $ 1000 in a single day, who can be Income tax department bothering you.
Some time income tax department unable to check your books or your income tax return and send you a notice
In one of the articles published in economic times ' Now auto dealers asked to report transactions above ₹ 2 lakh'
Income tax department asks car dealers to report transaction above 2 Lakhs, just to keep an eye and find out those taxpayers who tread to cheat income tax department.
But you have already maintained your books, you have all the answer of every penny you earned and paid tax for it.
Don't panic with income tax return, Play with it.
Filling your income tax return not only keep you confident but also enhance your credit score.
