| Item | LEASE | BUY |
|---|---|---|
| Initial Outflow | — | — |
| Monthly Payment | — | — |
| GST Component | — | N/A |
| Total Nominal Cost | — | — |
| Tax Deduction (Lease) | — | — |
| Depreciation Shield (Buy) | — | — |
| Maintenance Cost | Included | — |
| Residual / Salvage Value | Returned to lessor | — |
| NET COST (post-tax) | — | — |
| Metric | LEASE (OpEx) | BUY (CapEx) |
|---|---|---|
| Balance Sheet Treatment | Off-balance sheet (operating) | Asset + Liability on BS |
| EBITDA Impact | Reduces EBITDA (rent expense) | No EBITDA impact (below line) |
| P&L Treatment | 100% rental expense | Depreciation + Interest |
| Cash Flow (early years) | — | — |
| Debt-to-Equity Effect | No change | Increases D/E ratio |
| ROCE Impact | Positive (lower capital) | Lower (capital locked) |
| Flexibility | Return/upgrade at term end | Sell (residual risk) |
| GST ITC Benefit | GST on rent (ITC if eligible) | Full GST ITC on purchase |
| Factor | Leasing | Buying (Cash) | Buying (Loan) |
|---|---|---|---|
| Ownership | No | Yes | Yes (after loan) |
| Monthly outflow | Lower | Nil (after purchase) | Higher EMI |
| Tax benefit (salaried) | Full rental deduction | None | Depreciation only |
| Depreciation risk | Lessor's risk | Owner bears it | Owner bears it |
| Best for | Low km, tax savers | Long-term holders | Mid-term, credit users |