Lease financing
Querist : Anonymous
Our company is planning to buy a machinery on lease financing. Major terms of lease are as follows:
1. All the risks and rewards are transferred at the time of lease start
2. We will pay monthly lease rental comprising of principal and interest.
3. At the end of term of lease, we will be offered an option to legal entitlement at a token money.
As per AS-19, we will book the asset at full cost in our books of accounts, provide depreciation and reduce lease liability by each monthly principal payment.
My doubt is for income tax computation:
1. Are we entitled to depreciation? I believe not. Will we be entitled to depreciation after end of lease when we get the ownership?
2. What will be monthly lease rental expenses allowed under income tax? Only interest or interest and principal both.
02. The full amount (What you are referring as principal +interest) will be allowed as lease rent
Querist : Anonymous
Please advise whether ST will change to 15%?
Querist : Anonymous
Click here to login now
Similar Resolved Queries
- Section 270A penalty
- GST Registration Application -Rejected
- GSTR 9C- Table 9
- Tax liability on gift amount given to blood relation
- International transfer pricing- -> father entity vs son entity ->WHERE NO mutual say in management
- Query on solved queries
- Reimbursement of expense- GST applicable or not
- Form 104 stamp paper deed
- To Whom the Professional Invoice should be Raise
- Sale Proceed of Urban Agri. Land received in Advance in FY 24-25 but Registry is made in next year
- PLACE OF SUPPLY FOR COMMISSION AGENT
- Transport service POS
- E INVOICE, E-WAY, INVOICE
- GST RATE ON CONSTRUCTION BRICKS ?
- E stamp paper purchase
- Problem in filing Returns for International workers in EPFO
- Clarification for reversal of IGST on transfer of duty-free imported goods from EOU to DTA unit
- EXCESS CREDIT REALTED GST REVERSAL
- Export invoice not reported
- CA Articleship Extension Matter
Trending Online Classes
-
Live Course on GSTR 9 & 9C for FY 24-25(Detailed discussions, FAQ, Case studies and Live demo of GSTR 9/9C on GST Portal)
Industry Expert16 November 2025
CAclubindia
