Am I Eligible for Tax Benefits While Leasing a Car in India?
The current pandemic and its outrageous precautions have taught us to be socially distinct. While it may work in nationwide lockdown, but it tends to become a pain in our crowded workplaces and the commuting we encounter in between. These unprecedented times force people not to be a part of shared mobility and avoid public transport. After all this, one may want to have his/her car which can help them to commute safely. But owning a car isn’t as easy as it sounds – you will have to take care of servicing, insurance, EMIs and many other factors. Car leasing is an emerging service in India and picking up traction faster than ever – all due to its long list of benefits and savings.
Car leasing provides a complete hassle-free ownership experience to the user who pays a nominal monthly fee under a fixed contract which – generally – includes all the charges including serving, insurance etc. There are a lot of indirect benefits which one can have by leasing a car including tax savings.
Benefits of Leasing a Car for User
Tax Savings – If you are a salaried employee or a small business proprietor, you can enjoy some good tax savings. As lease rentals are deducted from your CTC before imposing the tax, you enjoy an increased in-hand salary thanks to the tax savings because of your leased car.
In case of a business owner, one can lease a car for business use and have the monthly lease as tax-deductible payments which are shown as an expense for the business, hence reducing the profits and tax impositions.
Zero Down Payment as you pay monthly rent for the car. Along with that, car leasing agencies offer discounts and schemes to attract customers.
Car leasing service offers unmatched convenience. The user does not have to care about servicing costs, mechanical failures, insurance and general wear and tear. On top of that, the user can also alter the contract accordingly and can also increase the tenure of the contract upon usage.
Once the contract is over, the user returns the car to the leasing company without any hassle. It saves you a lot of effort and time which you will otherwise spend to find the second owner for the car you own. Having said that, if you don’t want to part ways with your leased car, some leasing companies in India also provide the option for transfer of ownership to the user even when the contract is about to end or ended.
So, if you are a small business proprietor, doctor, lawyer or a salaried employee, you can lease a car depending upon your usage and also get tax savings. However, if car leasing sounds too good to be true, it has its disadvantages as well which include limited kilometres per year, lack of customization options. A lease is preferable if you expect to use the vehicle between three to five years and drive up to 20,000 km per year. Standard Lease agreement typically comes with the option of driving 5,000 km / 10,000 km / 15,000 km / 20,000 km per year with a flexible lease period of 24 months, 36 months, 48 months, 60 months.
Leasing a new car is easier than you think. Request for a free non-binding car lease quote from best leasing companies in India with a click or just have questions about how leasing works? Request a call-back or email us at firstname.lastname@example.org for our leasing specialists to help and answer your questions.
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