45 lakh people have incomes above Rs 10 lakh, but 25 lakh cars are bought every year

EMI bhi kuch hota hai.

And not everyone is buying those high end cars.

Salaried income earners are not rich. Landlords, small business owners, investors , etc. and even top farmers earn way more than any top salaried employee.

Source url please

there is big population of people who are rich farmers or use farm land to launder money. Many of the high value cars are purchased thru company names. If you look at the number of ITR 3/4/5 being filed.. they are of the highest numbers. Only, farming thru rented land is not profitable in india. Most farmers who own the land make good money. .

Corporates get to spend the money and then pay tax on the balance amount, so they have an incentive to purchase high end cars. ("instead of paying tax, we can spend it on something that we use"- kind of logic)

OP used too much logic that it overflew

Cars are also bought by households on dual/multiple incomes, and on car loans. People upgrade their cars after 3-4 years to get the depreciation benefit for business income. Also, there are economy cars under 10L which make sense in you live in a town with long distances with bad public transport..

Rich househoulds own more than one car, 35000 luxury cars a year is nothing!

Another reason, people can be irresponsible too. Inferring bad tax collection is very lazy deduction in Indian context.

Don’t you have to pay tax while buying new car? And if you do, won’t IT dept be able to figure out that you claimed no salary but are buying such an expensive product? Not saying tax evasion isn’t happening. This data point and conclusion is not the indicator for that.

Family businesses have one extra profit line: Gross profit, operating, Family profit and then Net Profit. Most family expenses including cars are in the company's name. Taxes are saved through depreciation.

The business living in the penthouse in my society owns multiple luxury cars and keeps changing them. Recently he sold his business and given it was available for sale his business returns were circulating in WhatsApp. He wasn't showing any profit in the last 5-6 years.

Digitizing the whole country will push these people to pay more tax

45>25 maths seems correct