In the recent years car leasing or operating lease as it is popularly know has taken the Indian Corporate sector by storm. With the increasing popularity of vehicle leasing the most common problem consumers are faced while buying a new car is whether to opt for a lease or a bank loan. However there are many people who don't even consider leasing as an option. Hence we feel the need to post this article to help you the consumer see the benefits of car leasing as opposed to a car loan to help you make a better and an informed decision.


Car Loan


As per Companies Act, 1956 the asset would not be capitalized on the balance sheet hence protecting it.

The asset value will be capitalized on the balance sheet as per Companies Act 1956.


Depending on the type of lease opted for the maintenance, repairs and running costs are included in the lease

The owner of the vehicle is liable for all costs and maintenance repairs related to the vehicle


Since you are paying for a portion of the vehicles full value leasing payments are usually lower than loan repayments.

Since you are paying to purchase the entire car loan repayments are usually higher than leasing payments.

Tax Benefits

According to the Income Tax Act, 1961 the annual lease rental that you pay can be expensed out in the Profit & Loss account which would qualify for Tax benefits.

The interest component of the annual installments that you pay can be expensed out in the Profit & Loss account. There are no Tax benefits associated with Loan as per the Income Tax Act,1961