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- is the car lease wet lease or dry lease and at the end of the lease are you supposed to pay RV (residual value) or market determined rate. in case you are being offered a dry lease with but RV value and the rate of interest is between 4% then car lease works out to be interest free loan if you are in 30% tax bracket. this is cause the interest you end up paying gets compensated with the tax you save. the opportunity cost etc is the profit.
the situation will change in wet lease with market determined rates at the end of the tenure.CommentQuote0Flag
- it seems not many have knowledge about this like meCommentQuote0Flag
- Originally Posted by jackdanielit seems not many have knowledge about this like me
At least you are modest !
Is the company leasing for you? Will it be adjusted against your ctc ?CommentQuote0Flag
- Originally Posted by Que SeraAt least you are modest !
Is the company leasing for you? Will it be adjusted against your ctc ?
Thanks for the reply. your question gave me hope that you have answer to my question.
Yes the company is leasing for me and it will be adjusted against my ctc as well.
There is a residual amount to be paid at the end of the tenure.CommentQuote0Flag
- If you collect the cash from the company, taxes will be applicable.. So think of the lease amount as being subsidised at 30% by goi. A perquisite tax is applicable but the value of the perquisite is capped at rs 2400 pm if i am not mistaken.
Ideally you would be able to buy the car at residual value, which is substantially lower than the market value of a similar car, thanks to depreciation on the car which is claimed by the co. I have known people to sell the car and make a decent profit on it.. And lease a new car.
This is basically a tax arbitrage game and while i do not have the figures applicable to you, most of the time it makes financial sense to avail the lease.CommentQuote0Flag