Car Lease vs
Direct Purchase
Save Big on Tax
Discover how structuring your car through a Company Lease Policy can legally save you lakhs in income tax every single year.
What is a Car Lease Policy?
A Car Lease Policy allows employees to get a car through their employer as part of their CTC. The employer leases the car, and the rental is deducted from the employee's pre-tax salary.
Instead of paying EMI from post-tax income, you pay lease rentals before tax — the government taxes only a small fixed perquisite value, not the full lease amount. This is perfectly legal and government-notified.
Perquisite Value – FY 2026-27
💡 Tax is calculated ONLY on this fixed perquisite value — not on your actual lease rental. That's the entire magic of this strategy!
| Category | Monthly Perquisite Value |
|---|---|
| 🚙 Car up to 1600cc | ₹5,000 / month |
| 🚕 Car above 1600cc | ₹7,000 / month |
| 🧑✈️ Car with Driver | Up to ₹10,000 / month |
See the Difference Clearly
Direct Car Purchase
Car Lease Policy
💰 Your Net Annual Tax Saving
More Reasons to Choose a Lease
Lower Effective Car Cost
Save 25–40% on your car's actual cost if you're in the 30% tax bracket.
Fuel & Maintenance
Both can be structured tax-efficiently within the corporate lease arrangement.
Buy at Depreciated Value
Car transfers to you at book value after lease — much lower than market price.
Better Cash Flow
No large upfront payment. Your pre-tax salary handles the lease seamlessly.
Zero Down Payment
Unlike a car loan, no need to block your savings or investments.
100% Legal
Fully compliant with Income Tax Act. Backed by government-notified perquisite rules.
🏆 Final Verdict
A Car Lease Policy can reduce your effective car cost by 25% to 40% if you are in the 30% tax bracket. It is one of the most powerful salary structuring tools available to salaried employees in India — and most people don't even know about it!
Want to Structure Your Salary Smartly?
Get CA-guided, professional assistance to design your tax-efficient compensation and start saving today.
No comments:
Post a Comment