Under income-tax provisions, depreciation on lease asset is allowed to:

Lessor

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Lessee

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Any of the two

No worries! We‘ve got your back. Try BYJU‘S free classes today!

None of the two

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A Lessor
The tax treatment of lease transaction in India is based on whether the lease qualifies as a lease or will be treated as hire purchase. If the transaction is treated as a lease, the lessor shall be eligible for depreciation on the asset.
The entire lease rentals will be taxed as income of the lessor.
The lessee, correspondingly, will not claim any depreciation and will be entitled to expense off the rentals.

Suggest Corrections

Similar questions

Q. Under the provisions of AS-19 'Leases', a leased asset is shown in the balance sheet of:

Q. An additional purchase of Rs. 2000 was made for a machine on 10th October. Under straight line method, under Income tax Act, depreciation __________.

Q. During sale of Asset the accumulated Depreciation in Provision Account is transferred to _______.

Q. In the case of assets used for generation and distribution of power, the Income-tax Act prescribe which of the following method of depreciation.?

Calculate Return on Investment from the following information :

Net Profit after Tax : Rs. 6,50,000; 12.5% Convertible Debentures : Rs. 8,00,000; Income Tax : 50%; Fixed Assets at cost : Rs. 24,60,000; Depreciation Reserve : Rs. 4,60,000; Current Assets : Rs. 15,00,000; Current Liabilities : Rs. 7,00,000.

Join BYJU'S Learning Program