Assumptions: | Equipment Cost (₹) – 15,00,00 | |
| Private ltd, Term (Tenure)- 5 years, Sec. Dep- 20% | |
| 60 monthly payments of ₹ 45,000 | |
| Tax relief @ 25% | |
Lease Rental | | |
Year | Monthly Payments | Tax Relief @ 25% |
1 | ₹ 45,000 x 12 | ₹ 1,35,000 |
2 | ₹ 45,000 x 12 | ₹ 1,35,000 |
3 | ₹ 45,000 x 12 | ₹ 1,35,000 |
4 | ₹ 45,000 x 12 | ₹ 1,35,000 |
5 | ₹ 45,000 x 12 | ₹ 1,35,000 |
| Total Tax Relief | ₹ 6,75,000 |
Paying Cash | Depreciation on Capex – 15% | |
Year | Capital Allowances/Depreciation Claim | Tax Relief @ 25% |
1 | 15% of ₹ 15,00,000 = ₹ 2,25,000 | ₹ 56,250 |
2 | ₹ 1,91,250 | ₹ 47,813 |
3 | ₹ 1,62,563 | ₹ 40,641 |
4 | ₹ 1,38,178 | ₹ 34,545 |
5 | ₹ 1,17,451 | ₹ 29,363 |
| Total Tax Relief | ₹ 2,08,611 |