DR SUNDEEP NIGAM
May 12, 2011 6:16 am
i have to buy a car costing around 6 lakhs.i have two option either to give full 6 lakhs in cash after selling my equity mutual fund or pay 2-3 lakhs in cash and rst by auto loan which is better option.
Dear Dr Sundeep Nigam, Your question also have Tax angle. If a professional purchase a Car thru Auto Loan, the interest paid is available for set off from his income as business expenses, same is not available for salaried class. Not only Interest but fuel expenses, Car Ins. policy prem., Maint. expenses are also eligible for set off & the yearly depreciation benefit is also there for Professionals.
Based upon your own condition professional or salaried decide to take auto loan.
according to me, paying cash in full is better.
you are not sure of the returns that you might get from equity mutual funds. if u sell now, it is like profit booking. one should frequently do the profit booking.
if it is home loan rather than auto loan, then i would have suggested to go for loan for certain amount.
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