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A lease is
a contractual arrangement calling
for the lessee (user) to pay the
lessor (owner) for use of an asset.
• Generally there are two parties to a lease
agreement
• Leasing is used for financing the use of fixed
assets of high value. In India equipment
leasing is very popular.
• The term of the lease is called the lease
period. It is the period for which the lease
agreement is in operation.
• Lease rentals constitute the consideration
payable by the lessee as specified in the
lease transaction.
• Ownership
• Up-front costs
• Monthly payments
• End of term
• Basic tax treatment of lease
• Rates of depreciation
• Depreciation allowance on
lease transactions
• Sale and leaseback
transactions
Legal Aspects of Leasing
• As there is no separate statue for
equipment leasing in India, the provisions
relating to bailment in the Indian Contract
Act govern equipment leasing
agreements
• Since an equipment lease transaction is
regarded as a contract of bailment, the
obligations of the lessor and the lessee
are similar to those of the bailor and the
bailee
Leasing

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Leasing

  • 1.
  • 2. A lease is a contractual arrangement calling for the lessee (user) to pay the lessor (owner) for use of an asset.
  • 3. • Generally there are two parties to a lease agreement • Leasing is used for financing the use of fixed assets of high value. In India equipment leasing is very popular. • The term of the lease is called the lease period. It is the period for which the lease agreement is in operation. • Lease rentals constitute the consideration payable by the lessee as specified in the lease transaction.
  • 4.
  • 5.
  • 6. • Ownership • Up-front costs • Monthly payments • End of term
  • 7. • Basic tax treatment of lease • Rates of depreciation • Depreciation allowance on lease transactions • Sale and leaseback transactions
  • 8. Legal Aspects of Leasing • As there is no separate statue for equipment leasing in India, the provisions relating to bailment in the Indian Contract Act govern equipment leasing agreements • Since an equipment lease transaction is regarded as a contract of bailment, the obligations of the lessor and the lessee are similar to those of the bailor and the bailee