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Lease vs Buy

The benefits of leasing?

Leasing is a very cost-effective way to invest in business equipment. In addition to its many benefits this option competes very well in simple monetary terms.

More on the benefits of leasing
Lease v Buy

By leasing equipment your business could benefit from tax relief on the profits you earn.

Tax relief is also available for cash purchases, so have a look at the examples below to see what is best for you:

Assumptions:Equipment Cost (₹) – 15,00,00.00 
 Private ltd, Term (Tenure)- 5 years, Sec. Dep- 20% 
 60 monthly payments of ₹ 45,000.00 
 Tax relief @ 25% 
Lease Rental  
Year    Monthly PaymentsTax Relief @ 25%
1₹ 45,000 x 12₹ 1,35,000
2₹ 45,000 x 12₹ 1,35,000
3₹ 45,000 x 12₹ 1,35,000
4₹ 45,000 x 12₹ 1,35,000
5₹ 45,000 x 12₹ 1,35,000
 Total Tax Relief₹ 6,75,000
Paying Cash Depreciation on Capex – 15% 
Year    Capital Allowances/Depreciation ClaimTax Relief @ 25%
115% of ₹ 15,00,000.00 = ₹ 2,25,000.00₹ 56,250
2₹ 1,91,250.00₹ 47,813
3₹ 1,62,563.00₹ 40,641
4₹ 1,38,178.00₹ 34,545
5₹ 1,17,451.00₹ 29,363
 Total Tax Relief₹ 2,08,611
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Notes: Equipment costs and monthly payments assume GST should be added. The above are for example purposes only and tax relief is based on 25%. Always consult your accountant or financial advisor to see what is best for your business. Want to find out more about tax relief? Click here