[mtnrajdeep]

I took a leased car recently and the lease company has done the following

1. Base price (excluding GST) is considered as financed amount
2. EMI amount calculated on financed amount
3. GST (same as car GST %) applied on EMI amount.
4. Residual value is on financed amount and GST is applicable on that
5. Car is in company name and lease payment deducted from pre-tax income.

[DCEite]

Originally Posted by mtnrajdeep

I took a leased car recently and the lease company has done the following

1. Base price (excluding GST) is considered as financed amount
2. EMI amount calculated on financed amount
3. GST (same as car GST %) applied on EMI amount.
4. Residual value is on financed amount and GST is applicable on that
5. Car is in company name and lease payment deducted from pre-tax income.

Yes this is exactly how it's done.

Additionally:

1) Car is in name of your organization and hypothecated to the leasing company till the lease period

2) You get tax benefit upto a certain limit (varies from company to company) on the fuel and maintanence component.

3) Yearly insurance is paid by the leasing company on behalf of organization until the lease period is over.

[thanixravindran]

Originally Posted by mtnrajdeep

I took a leased car recently and the lease company has done the following

1. Base price (excluding GST) is considered as financed amount
2. EMI amount calculated on financed amount.

How much is the interest charged now by lease company? Is it same as car loan market interest rate?

[mtnrajdeep]

Originally Posted by thanixravindran

How much is the interest charged now by lease company? Is it same as car loan market interest rate?

Interest is 10.55%. i think it is higher than normal car loans but there are aspects of maintenance, insurance, fuel allowance, driver allowances that sweeten the deal.

[vivekrvcse]

What happens at the end of the lease period?

How much is the residual value?

What if you buy at 10L as Residual value and sell for 30L? Pay tax on 20L?

[pmbabu]

Originally Posted by pmbabu

48% (14% + 14% + 20%) on finance, and 18% (9% + 9%) on fleet management are the taxes on EMI components.

And 48% (14% + 14% + 20%) tax on buyback value.

The %ages above are for a SUV (for your reference).

Update: RV / Residual Value seems to vary from company to company. With GST it seems to be in the range of 34-40% of the ex-showroom price.

That's a high variation - for cars around 25 lakhs ex-showroom, the difference would be in the range of 1.5 lakhs!

[SDx]

Originally Posted by DCEite

1) Car is in name of your organization and hyothenticated to the leasing company till the lease period

In my organisation, car is now in employee's name. Earlier it used to be this way. A very welcome move.
No hassle of RC transfer, easier to sell at the end of the lease.

Or, keep it for 10 years as we promote on this forum .

Originally Posted by DCEite

3) Yearly insurance is paid by the leasing company on behalf of organization until the lease period is over.

Insurance is dedicated from my salary, I claim it back under maintenance.

Originally Posted by vivekrvcse

What happens at the end of the lease period?

How much is the residual value?

For us, residual can be either be 1% or 10% of the financed value. I am on my third car lease, choose 10% under my first lease, never after. At the end of term 10% seems a bit too high for an old car.

Sold both cars, first one directly to someone through OLX. Second one through cars24, earlier this year. This one, I had to get transferred in my name first.

[TECHNOGIRISH]

Hi folks,

Has anyone taken a company lease to buy an EV? I want to understand the net GST variance in the lease rental in the case of EV compared to an ICE car. Will appreciate some insights on the same.

Thanks!

[Love4Cars]

GST applicable for any car in lease is same as on ex-showroom. Hence, in case of an EV it will be 5% GST. For EMIs it doesn't matter if the GST is 48% or 5% as you are just paying EMI in form of Pre-tax deduction.

However, depending on Residual Value (RV), GST may have an impact on your car buy back. For an Ex showroom 20L car with 5% as RV, you will need to pay 1L + 48% GST for an SUV vs 1L + 5% GST for an EV.

Hence, lower your RV at the end of lease term, lower the impact of GST. Do keep in mind that you don't get to claim fuel reimbursement in case of EV, which impacts how much you save on taxes, but iy does lower your running costs too.