The Federation of Automobile Dealers Associations (FADA) has called on the government to introduce tax benefits for vehicle depreciation in the upcoming Budget 2024. This move, as per FADA, aims to not only widen the tax base but also spur demand in the automobile sector.
In its pre-budget wishlist, FADA emphasized the need for individual taxpayers to be allowed to claim depreciation on vehicles. This, they argue, would encourage more people to file income tax returns while boosting the purchase of automobiles across the country.
Mr. Manish Raj Singhania, President of FADA, highlighted the significance of this proposal, stating, "We urge the finance ministry to introduce the benefits of claiming depreciation on vehicles for individuals paying income tax." Singhania believes that such a step would not only attract more taxpayers into the system but also stimulate demand within the automotive market.
Additionally, FADA recommended a reduction in corporate tax rates for Limited Liability Partnerships (LLPs), proprietary firms, and partnership firms. Singhania pointed out that while the government has already lowered corporate tax to 25% for private limited companies with turnovers up to Rs 400 crore, extending this benefit to other business structures is crucial. Many traders within the auto dealership community operate under LLPs, proprietary, and partnership models, making this tax reduction essential for their growth.
Looking ahead to the budget announcement on July 23, Finance Minister Nirmala Sitharaman will present the Union Budget for 2024-25. FADA has strongly urged the government to consider these proposals seriously, viewing them as critical measures to revive the automotive industry and contribute to the broader economic recovery.
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