Homework Answers
- As lease rentals are considered as a revenue expense while determining taxable profits, it is advantageous for the bank in minimising tax liabilities.
- The lessee (bank) can also arrange to adjust lease rentals in such a way that it reduces his tax liability and thus helps him in tax planning.
- If the bank feels like their business is not thriving in that area the can easily shift to another location as they took the building on lease.
- The lease payments would be less than the loan repayment amount if they purchased the land and building.
- The risk factor is low for leasing and the documentation for the same is also easy and simple.
- It saves time as buying the land and constructing a building consumes more time and money.
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I need some help please
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