[anjan_c2007]

The Federation of Automobile Dealers Associations (FADA) has yesterday appealed to the finance ministry to allow individuals claim depreciation benefits on the purchase of new cars. Their statrment was "We urge the finance ministry to introduce the benefits of claiming depreciation on vehicles for individuals paying income tax." FADA President Manish Raj Singhania said that this would ignite demand and boost new car sales.

Their other contention was that allowing individuals to account for depreciation benefits will also increase the number of income tax filers.

In its pre-budget wishlist, the Federation of Automobile Dealers Associations (FADA) also asked the finance ministry to reduce corporate tax for LLPs (Limited Liability Partnership), proprietary, and partnership firms. These measures according to FADA will aim to stimulate the automotive industry and the broader economy.

The news:-

https://m.economictimes.com/industry.../111684882.cms

Till this time, many categories of non-individual, income tax payers have had the privilege to claim depreciation benefits on capital expenditure including that for new motor vehicle purchases. But these categories of taxpayers did not get the "standard deduction" benefits allowed to individual tax payers. Hence this FADA suggestion to allow depreciation benefits on new cars (two wheelers etc should also be included) if taken positively by the finance ministry could mean that the individual taxpayer may be given the option to either claim standard deduction or claim depreciation benefits for the new automobile.

[shadkhan]

It's a good move. However I don't have high hopes for the govt. to lose revenue by implementing this.

[dgindia]

Individuals who has income from "Business & Professions" can claim depreciation on cars provided these cars are used for the purpose of furtherance of the profession or business.

As of now, depreciation on cars is not allowed for any person when car (or any vehicle) is used for personal purposes. If govt allows, then it will be game-changer and usher in more demand for automobile industry; just as tax benefit on interest on housing loan did to real estate many years ago.

Chances of government opting to propose this in budget is remote, as they wouldn't want to loose revenue.

Keeping fingers crossed.

[frewper]

This will never happen. Govt will never allow this in their wildest dream. Even if the govt wants to do something for the general tax paying public, it will move the tax brackets than implement some thing like this.

Anyways this is FADAs idea. I wont drop a penny on FADAs ideas. Absolutely no understanding of macro economics on this. Time and time again they have come up with ideas that are absurd and laughable.

A more viable and reasonable request would be to remove cess from vehicles. Absolutely unnecessary and its existence is only to tax those who are already heavily taxed.

[Turbohead]

Originally Posted by frewper

Anyways this is FADAs idea. I wont drop a penny on FADAs ideas. Absolutely no understanding of macro economics on this.

Why do you say there is no understanding of macro economics on this? Please elaborate!

I feel this is a great idea! The current policy enabling EV buyers to deduct interest on loans is one of the reasons why EVs are popular! Why not these ideas?

[frewper]

Originally Posted by Turbohead

Why do you say there is no understanding of macro economics on this? Please elaborate!

I feel this is a great idea! The current policy enabling EV buyers to deduct interest on loans is one of the reasons why EVs are popular! Why not these ideas?

Why I find FADAs ideas stupid? Well allow me to not explain it all over again.

1. https://www.team-bhp.com/news/fada-p...protection-act

2. https://www.team-bhp.com/forum/india...ing-price.html (FADA wants a fixed dealer margin of 7% of the car's selling price)

3. https://www.team-bhp.com/forum/motor...lerships.html\ (FADA expresses concern over mushrooming of Humpty Dumpty two-wheeler dealerships)

...just to name a few. And there are many more out there.

FADA even opposes to online sales of vehicle as well. It will even be happy to not let you buy original spares directly from the company outlet and only through them. If they really had it their way they would even ban servicing your can at an FNG.

FADA is a group of folks who have come together and wants to create an automobile cartel in this country, so that whenever anyone buys a car they get paid. PERIOD.

Again how you ask? Remember the last time you went to buy a car and your insurance quote was 2-4x of than the actual price. They just want to make sure they make it illegal for anyone to buy car insurance from a third party rather than the dealer.

Thats what FADAs aim is. Complete dominance and no mercy to any customer who wants to buy a car.

So let us not get carried away by what these nimwit's keep proposing. They are doing this just to grab eyeballs and showing that they are on the customers side.

As far as the proposal is concerned i.e. allowing individuals to claim depreciation on the sale of car, is ill though of because : If thats the case then why not allow individuals to claim depreciation on the following as well.

• Air Conditioning
• Fridge
• TV
• Music System
• Furniture etc

FADA equivalent for LG and Samsung and other white goods manufactures would be very happy if that can be done, isnt it?

Why stop at this. Lets allow individuals to claim expenses on the following as well.

• Petrol/diesel
• Groceries
• Restaurant Bills
• Vacations
• Student Fees

Now once all the depreciation and expenses are claimed the individual can pay tax on the rest of the money.

I can tell you there will be nothing left to tax.

Now, doesn't this all sound stupid? All consumption of goods by end customer is necessary to be taxed at some point. You cannot allow tax exemptions or depreciation at the end of the supply chain.

Hence FADAs proposal to allow depreciation claim individuals is a not meant to benefit the customer, but for the dealers to increase their sales hence their profit.

FADA just wants a red carpet for their business like its their birth right. Who do they think they are? Adani's and Ambani's ? Keep dreaming FADA.