Income Tax Department sends notice to car dealers after demonetisation

The Income Tax Department will review the car purchase transactions made after the demonetisation, especially for dealers and customers who dealt in high volumes of cash

By: | Published: December 27, 2016 3:19 PM

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The Income Tax Department has issued a notice to car dealers across the country asking for a list of customers who have bought cars after the demonetisation of Rs 500 and Rs 1,000 currency notes that was put into effect from 8th November 2016, reports India Today.

In the notice, the IT department has demanded the name of the customer, vehicle purchased, invoice cost, booking date with cash or cheque and bifurcation of the amount received by the dealer. These customers would start to get notices from 1st January 2017 once the list has been received and examined by the tax department, although, the criteria for sending notices has not been disclosed fully yet.

In addition, car dealers will have to furnish their bank account statements with details of all transactions from 1st November 2016 till date. The IT department is assuming that after the demonetisation of Rs 500 and Rs 1,000 currency notes, people may have purchased a vehicle in order to exchange their black money. Access to the mentioned data will allow the Government to track the dealers and customers who have bought cars to convert their unaccounted wealth.

This move is expected to have a greater impact on luxury car dealers and buyers as people with such purchasing power are usually expected to have black money. The Government has not revealed the fine points and implications for the offenders yet, so it would be interesting to track the outcome of this initiative.

However, after demonetisation, car dealers as well as manufacturers, in general, have encouraged the use of cashless modes of payment to potential customers for their new car purchase and after sales service as well.

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