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Old 7th April 2009, 13:49   #61
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Originally Posted by neosmart View Post
As far as I know, in case of theft of total loss of vehicle; one gets nothing back from the insurance company and all of it goes to lease provider.
Man, that's a brilliant point and one that I, admittedly, failed to consider. If the car gets stolen, you would *probably* stand to lose all payments made toward the lease. However, I am unsure of this and best would be to ask the leasing company for a clarification. Will shoot out an email before the end of the day.

It must be said that even in a loan, depending on your downpayment / financing structure, anywhere between 70 - 100% of the insurance payout will go toward clearing the outstanding loan amount. In some cases, I've heard of the owner making EMI payments between the period of the car getting flicked and the insurance companies settlement.
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Old 7th April 2009, 18:06   #62
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*update*. I received the following reply. Yup, definitely seems to be a major disadvantage of leasing:

Quote:
In case of a total loss or theft for cars upto 40 lakhs incase an eventuality like this happens you just pay Rs 30,000 and exit irresepcetive of the car and when it happens in the tenure.
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Old 15th April 2009, 10:57   #63
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Default More details on reimbursements

Hope I'm not completely out of topic here.
I have a query on reimbursements. I own the car, but my company allows claims on fuel, driver & maintenance as pre tax. I would like to know the list of items allowed under the 'maintenance' head, other than the regular car servicing stuff and insurance. I remember reading somewhere that interest on EMI is allowed. I checked with the finance guy in my organization and he said he's not sure. Can anyone throw some light on this please?
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Old 24th April 2009, 17:26   #64
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In case of a company car lease conversion to a Car loan and the lessee from the car lease is taking the car loan, (say the interest rates drop to 10 % for car loan and the lease was locked @ 14 %) is that treated as a used car loan and the loan rates and would higher used car rates apply. Is it treated differently for a car lease that is less than a year old than one that's older than that.

also is it a possible/good idea to go in for a individual lease from the same vendor or a different vendor like teamlease in such a scenario

Last edited by marlinspike : 24th April 2009 at 17:27. Reason: adding after thought.
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Old 26th April 2009, 19:16   #65
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Lease car owner,
is the leasing company changing interest rate, based on RBI interest rate changes? (current orix interest rate is 15%) like housing interest rate may be by 0.5%/.75% reduction.

Also if the lease car is last/damaged then what ever emi paid by us is total waste, isn't it ? is there any way/additional policy to secure our EMIs ?
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Old 1st July 2009, 16:01   #66
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Default boundary of 10lacs

Car lease brings in added advantage if one is at the boundaries boundary of 10L income(~ +3L), or any other tax slab where you end up in lower income tax slab with lease payments.
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Old 16th July 2009, 11:55   #67
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Anybody has an update on effects of removal of FBT on car lease? does an employee have to pay 30% tax (which he was saving by taking car on lease)?
If Yes, it will have a huge impact on monthly outflow of everybody who took tax benefit in to account while choosing the emi
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Old 13th August 2009, 16:39   #68
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Default Scenario?

What about this scenario :

Say Mr. X is a business owner, who runs a partnership firm by the name of Business Inc.
But can Mr. X being the business owner, offer the leaseplan to his employees through a tie-up with the leasing firm? AND take a car for himself on lease? So who all get tax benefits? The company - Business Inc.? or Mr X in his individual capacity?

Also, if the lease is for 3 yrs, and I continue to pay the requisite amount every month, after 3 yrs, can I choose not to take the car and buy a new one or get a new lease on a new car?
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Old 23rd November 2009, 22:01   #69
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Default Impact of proposed IT changes from Apr2011 on car lease

Dear fellow TBHPians,

Would appreciate your expert views on the impact of the proposed changes in income tax from April 2011 on the car lease tax benefits.

I have received a internal communication from my employer.
In essence the car lease policy will no longer exist after April 2011, subject to the proposal being implemented. Also any new lease being entered now would be for a shorter period ending mar2011 hence higher EMI, and unaffordable.

The car lease policy was a great boon for us, the salaried class, to live our automotive dreams.

Just when my lease is closing in Jan 2010, we hear this news. Still trying to get into the finer details of the communication. Hope I would realize the dream to upgrade from my existing Honda ZX VTEC.

Thank you for your comments.
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Old 23rd November 2009, 22:12   #70
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I guess you mean Apr 2010.

I have no clarity what it means from my employer as they haven't sent any clarification mail on this one yet. But it looks like the tax benefits associated to a Lease is gone, and thats a big downer.
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Old 23rd November 2009, 22:46   #71
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Correct me if I have understood wrong:

You are referring to to a lease-plan type deal where your employer structures your salary so that the car EMI goes as a perk and you can save some tax on the overall cost of the car as opposed to a direct purchase.

Govt proposes to have a low flat rate of income tax and abolish most of the tax benefits.

I think this has to do with tax saving and not affordability, as if you can afford to to pay the lease charges on the same car, you can also pay the EMI.

Whatever tax benefits you will lose in the case of the 'benefit's being abolished will easily be recovered by the lower standardized tax rate, for example just 10% for 1.5 lakh to 10 lakh slab.

I think this is reason to celebrate, as at least every buyer even on a normal EMI pays less tax, rather than a few lucky folk who's employer agrees to structure their salary like that. Similar for folks who don't claim House Rent Allowance despite paying rent because they don't want to fake receipts etc.

The less regulation, the simpler it is for everyone.
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Old 23rd November 2009, 23:15   #72
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Correct me if I'm wrong. I recollect being told that this was retrospect from April 2009 i.e. tax benefits for the current financial year cannot be claimed as well.

I was told that the benefits of the to be scrapped scheme were that the following were part of non taxable income,
* Lease paid on car
* Sriver salary
* Fuel
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Old 24th November 2009, 09:57   #73
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My current employer has already indicated that all leases with the company will cease by Mar 2011. They will pay the foreclosure penalties, if any.

I agree with the view from chncar, the current 30% slab is even for a taxable income of 5L per annum whereas with the new policy the 30% slab is proposed for a taxable income of over 25L. So whatever we lose in terms of perks and tax benefits we can recover to a certain extent via the lower tax rate.
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Old 24th November 2009, 10:02   #74
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Though I am not sure about the impact on the lease part, the car allowance that came under the purview of FBT has been abolished and instead PV (perquisite value) has come into to effect from Apr 2009.

Now for a car with <1.6 ltr engine, the Fuel + maintenance + insurance amount permitted per month is 1200Rs and anything more will be treated as PV and added to taxable salary. For cars with >1.6ltr enginge, the permitted allowance will be Rs 1600 per month.

For driver salary, Rs 600 per month for any car is tax free and balance is taxable.This is as per my understanding from my employer.
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Old 25th November 2009, 18:38   #75
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Does anyone know of organisations operating out of Mumbai that offer lease plans to individuals self employed professionals such as doctors, lawyers etc.? Lease Plan (Car Leasing : LeasePlan India) seem to be offering the product to corporates only.
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