Hire Purchase

Lessor claims depreciation Buyer claims depreciation
On completion of contract residual (salvage) value goes to Lessor On completion of contract residual (salvage) value goes to Buyer
In absence of specific agreement otherwise, asset is to be returned to the lessor after the lease period. Asset is conclusively purchased by the buyer at the end of the agreement period.
Lease payment is fully deductible for tax. Only interest portion of EMI/ Hire value is tax deductible.
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