Set the exact Lease GST Rate (%) in the GST Decision Engine section below.
This tax shield applies only for business/professional use. Personal-use depreciation is an economic assumption, not an automatic income-tax deduction.
| Stream | Status | Statutory Basis |
|---|---|---|
| Purchase / Capital-Asset GST | — | — |
| Lease / Rental / Hiring GST | — | — |
| Insurance / Servicing / Maintenance GST | — | — |
| Gross invoice value | — |
| GST component | — |
| Recoverable ITC | — |
| Blocked GST (added to cost) | — |
| Net acquisition cash cost | — |
| Depreciable base | — |
| Gross monthly invoice (incl. GST) | — |
| Monthly cost after ITC | — |
| Monthly cost after ITC & income-tax | — |
| Scenario | Lease NPV |
|---|---|
| No-ITC scenario (all factors 0) | — |
| Legally indicated (engine) | — |
| 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 | Under Ind AS 116 / IFRS 16, most leases are recognised on the balance sheet (ROU asset + lease liability); genuine off-balance-sheet treatment applies only to short-term (≤12 months) or low-value leases, or under cash-basis/older frameworks. Classification depends on your reporting framework and contract terms. Buying always adds asset + liability on the 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 only if off-BS (short-term/low-value); otherwise the lease liability raises D/E under Ind AS 116 / IFRS 16 | 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 |
Enter the car's on-road price, your expected ownership period, and lease terms (monthly lease rental and lease tenure) alongside loan/cash purchase details (down payment, interest rate, loan tenure). The calculator computes the total cost of ownership (TCO) for each option — including EMI or lease outflows, depreciation, resale value, insurance, maintenance and applicable tax benefits for business users — and shows which option costs less over your chosen holding period.
Leasing typically wins for shorter holding periods and for business users who can claim the full rental as a deduction. Buying (via loan or cash) tends to win for longer ownership periods since the resale value offsets a large part of the cost. See our Lease vs Buy Car guide for worked examples.
| 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 |