Tax Planning Tool
Car in Business Name — 5-Year TCO Comparer
Depreciation saves tax, but GST ITC is blocked u/s 17(5)(a) CGST Act for most businesses. Does the company name actually win? Run the numbers.
The GST catch: s.17(5)(a) of the CGST Act blocks Input Tax Credit on motor vehicle purchases for businesses that don't sell/rent cars or transport persons as their core activity. You pay the full sticker GST with no credit — this often wipes out Year 1 depreciation savings entirely.
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5-Year Net Verdict
Personal name saves ₹4,79,899 over 5 years
Running cost estimated at 10% of purchase price per year. Actual result depends on your full financials.
Company 5-yr cost
₹27,29,899
Personal 5-yr cost
₹22,50,000
Company Name — Year 0 outflow
Ex-GST price₹15,00,000
GST paid (43%) — ITC BLOCKED u/s 17(5)(a) CGST₹6,45,000
Net initial outflow₹21,45,000
Annual perquisite value (taxable in employee's hands)₹28,800
Annual perquisite tax @ 30% slab + cess₹8,986
Personal Name — Year 0 outflow
Purchase price (from post-tax funds)₹15,00,000
GST on personal purchase—
Net initial outflow₹15,00,000
PerquisiteNil
Depreciation allowed?No (individual)
5-Year WDV Depreciation (s.32 @ 15%)
| Year | WDV (start) | Depreciation | WDV (end) | Tax saved (company @ 25.2%) | Running cost | Perq tax / year |
|---|---|---|---|---|---|---|
| Y1 | ₹15,00,000 | ₹2,25,000 | ₹12,75,000 | +₹56,633 | ₹1,50,000 | ₹8,986 |
| Y2 | ₹12,75,000 | ₹1,91,250 | ₹10,83,750 | +₹48,138 | ₹1,50,000 | ₹8,986 |
| Y3 | ₹10,83,750 | ₹1,62,563 | ₹9,21,188 | +₹40,917 | ₹1,50,000 | ₹8,986 |
| Y4 | ₹9,21,188 | ₹1,38,178 | ₹7,83,009 | +₹34,779 | ₹1,50,000 | ₹8,986 |
| Y5 | ₹7,83,009 | ₹1,17,451 | ₹6,65,558 | +₹29,563 | ₹1,50,000 | ₹8,986 |
| 5-Year Total | ₹8,34,442 | ₹2,10,029 | ₹7,50,000 | ₹44,928 |
Indicative only. Cite: s.32 WDV depreciation, s.115BAA, s.17(5)(a) CGST Act 2017, s.17(2)(iii) Income-tax Act 1961, Rule 3(2) IT Rules. Actual figures depend on your company charter, actual running costs, GST registration status, and whether the car is used exclusively for business. Read the full planning guide →