Planning to buy new Rs 10 lakh-plus car? Do it today or pay more from tomorrow

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If you are in the market for buying a car with a price tag of Rs 10 lakh or more, you should make the purchase before the day is over. This is because from June 1 (Wednesday), the luxury tax on vehicles over Rs 10 lakh, announced in Finance Minister Arun Jaitley’s speech will be applicable.

From June 1, a 1% luxury tax will be applicable on the purchase of vehicles priced at Rs 10 lakh or more.

This tax will be collected by the seller and will be applicable on the ex-showroom price, an NDTV report has said.

The luxury car tax will affect all carmakers that have SUVs and luxury cars on offer in India.

Apart from this, the Krishi Kalyan cess also comes into force from June 1. This cess, levied for collecting money for agriculture and farmer welfare, will be charged at 0.5% on every taxable item from Wednesday.

The government hopes to collect Rs 5,000 crore from this cess this fiscal. This will be over and above the Rs 10,000 crore it expects to rake up from the proceeds of the Swacch Bharat Cess.