| |
|
FINANCE LEASE |
|
OPERATING LEASE |
| Legal Owner of the Asset |
|
Leasing Company |
|
Leasing Company |
| Registered Owner of the Asset |
|
Lessee/Lessor |
|
Lessor |
| Risks and Rewards Related to asset |
|
With Lessee |
|
With Lessor |
| PV of Future Lease Rental |
|
>90% of the Asset Value |
|
<90% of the Asset Value |
| Residual Value |
|
<10% of the Asset Value (PV) |
|
>10% of the Asset Value |
| Ownership Transfer |
|
Lessee/Lessor |
|
Lessor |
| Capitalization (Lessee) |
|
Asset would be capitalized
on the B/S |
|
Asset would not be capitalized
on the B/S |
| Tax Benefits |
|
The annual lease rental that you pay can be expensed out in the
Profit & Loss account which would qualify for Tax benefits as per
the prevailing laws of the Income Tax |
| Depreciation as per company Act |
|
Lessee can claim |
|
Lessee cannot claim |
| Depreciation as per Income Tax Act |
|
Lessee cannot claim benefit |
|
Lessee cannot claim benefit |
| Payments |
|
Lease Rentals are higher |
|
Lease Rentals are lower as
compared to FL |
| Insurance and Maintenance |
|
Optional |
|
Has to be part of the transaction |
| Other Fleet Management Services |
|
Optional |
|
Optional |