LEASE TRANSACTION

This query is : Resolved

VISWANADH.R (Querist)
Follow

22 April 2009 In case of a lease transaction, who has the right to capitalise the asset?,lessee or the lessor. In this regard, is there any contradiction b/w AS and income tax act. To be precise in IT we treat lessor as the legal owner of the asset though he donot capitalise it. Please give me an expert opinion.

Taranjit Singh

Taranjit Singh (Expert)
Follow

22 April 2009 The tax treatment of lease transactions in India is based on whether the lease qualifies as a lease or will be treated as a hire-purchase transactions.

If the transaction is treated as a lease, the lessor shall be eligible for depreciation on the asset. The entire lease rentals will be taxed as income of the lessor. The lessee, correspondingly, will not claim any depreciation and will be entitled to expense off the rentals.

If the transaction is a hire-purchase or conditional sale transaction, the hirer will be allowed to claim depreciation. This is based on an old Circular of the Deptt issued in year 1943. The financing charges inherent in hire instalments will be taxed as the hire-vendor's income and allowed as the hirer's expense.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

RADHAKRISHNAN A R

madhuseshu yathirajam

Ashif Cheenikkal

SHRI HARIRAO

J.Vijai

Subscribe Now

LEASE TRANSACTION

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Manager- Finance and Compliance

Senior Executive

Accountant

CA Final

GST CONSULTANT

GST CONSULTANCY