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.
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