Lease
This query is : Resolved
M. Santhosh kumar
(Querist)
04 July 2011
What is financial lease? what is operating lease? Can any body provide me some examples?
ABHISEK TOSNIWAL
(Expert)
05 July 2011
Dear Santosh,
Finance lease is a lease where the lessor is not interested in the asset ,he is only interested in lease rent with interest portion.Thus the owner of the asset will be lessee in the income tax point of view and he can claim depreciation on the asset as per income tax..
But in case of operating lease the ownership remains with lessor as he doesnt acts as financer. Depreciation is claimed by lessor. lease rent paid is an expense for lessee and income for lessor.
For detailed answer go through AS 19.
Regards
Abhisek Tosniwal.
Finance lease is a lease where the lessor is not interested in the asset ,he is only interested in lease rent with interest portion.Thus the owner of the asset will be lessee in the income tax point of view and he can claim depreciation on the asset as per income tax..
But in case of operating lease the ownership remains with lessor as he doesnt acts as financer. Depreciation is claimed by lessor. lease rent paid is an expense for lessee and income for lessor.
For detailed answer go through AS 19.
Regards
Abhisek Tosniwal.
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