Legal Structure Explainer
Home leases, EV leases, and existing assets — all structured through one platform.
A plain-English walkthrough of the legal, tax, and corporate framework — what happens to your money, what gets taxed, and how the asset becomes yours.
LeaseBridge operates under well-established provisions of Indian law. The accommodation and car perquisite structure has existed since the Income Tax Act, 1961. Rule 15 of the Income Tax Rules, 2026 (the successor to Rule 3 of the 1962 Rules) provides a complete statutory valuation mechanism for employer-provided assets — no market rent test, no approval required, no new tax benefits created.
LeaseBridge productises what has historically been available only to senior executives at large corporations. Every Indian employer can lawfully provide cars and residential accommodation as perquisites and deduct the lease rental from the employee's gross CTC before income tax computation. The perquisite value — fixed by statute under Rule 15 at ₹2,000/month for EVs (₹5,000/month for ICE ≤1,600cc) for cars and 10% of salary for houses — is included in the employee's taxable income and reflected in Form 16.
Each asset (car or house) is purchased by a dedicated Special Purpose Vehicle (SPV) — a Private Limited Company incorporated under the Companies Act, 2013. The SPV is funded by our NBFC partner via an inter-company arrangement.
The SPV leases the asset to the employer. The employer provides the asset to the employee as a perquisite under Section 17(2) of the Income Tax Act. At lease end, the asset is returned to you through the applicable exit mechanism under the Companies Act.
The precise method and its associated costs (including any tax or stamp implications) are confirmed in your individual deal documentation before you sign. We ensure full visibility of the end-of-lease position before you commit.
For professionals earning ₹30 Lakh+ per year, the home lease structure under IT Rules 2026 delivers the largest annual benefit. Here's why: the taxable perquisite for employer-provided housing is the lower of the actual lease rent or 10% of your basic salary — completely unchanged by the 2026 rules while car perquisites tripled. A ₹1 Crore home leased through your employer saves ₹2–4 Lakh per year in tax, and the property becomes yours at lease end through the agreed mechanism.
Example: ₹40L CTC, ₹16L basic salary, ₹1Cr home in Mumbai. Annual lease: ~₹8,40,000 (pre-tax deduction). Perquisite added back: ₹1,60,000 (10% of ₹16L basic). Net pre-tax benefit: ₹6,80,000. Tax saving at 34.32% marginal rate: ₹2,33,376/year. Over a 20-year lease: ₹46+ Lakhs total — and the property is yours at ₹1.
The housing perquisite is calculated on basic salary only (excluding HRA, allowances, bonuses). This means the benefit scales with the lease value, not your total CTC — making it extraordinarily efficient for higher-value properties.
Under Rule 15 (IT Rules 2026, effective 1 April 2026), the perquisite value of a car is: EV ₹2,000/month · ICE ≤1,600cc ₹5,000/month · ICE >1,600cc ₹7,000/month. For residential accommodation, the perquisite is 10% of salary (metro cities), 7.5% (Tier-2), or 5% (Tier-3) — housing rates are unchanged.
The taxable perquisite is the lower of: (a) the actual lease rent paid by the employer, or (b) 10% of your basic salary (metro). In most cases where the lease value is substantial relative to salary, the 10% of salary figure is the lower amount and caps your taxable perquisite. You include only this perquisite in your taxable income — the balance of the lease deduction reduces your taxable CTC directly.
Example: Someone earning ₹18L CTC with a ₹15L EV on a 4-year lease has ~₹4,60,000 deducted from gross CTC pre-tax. Only ₹24,000 (₹2,000 × 12) is added back as taxable perquisite. Net taxable income reduces from ₹18L to approximately ₹13.8L.
⚡ EV cars: the smart choice under IT Rules 2026
The perquisite on electric vehicles was actually reduced to ₹2,000/month under the new rules — while ICE car perquisites jumped to ₹5,000–7,000. For the same ₹15L car budget, a Tata Nexon EV or MG ZS EV gives you a bigger CTC benefit, lower running costs, and the same asset return at lease end.
LeaseBridge structures are not tax avoidance arrangements. The SPV is a genuine lessor — it earns rental income, files income tax returns, and maintains proper accounts. The employer is a genuine lessee with a registered lease agreement. The employee is a genuine beneficiary under a lawful employment benefit.
The General Anti-Avoidance Rule (GAAR) under Sections 95–102 of the Income Tax Act requires arrangements to lack commercial substance to be impugned. LeaseBridge arrangements have clear commercial substance: the SPV owns a real asset, earns real rental income, pays advance tax on that income, and operates at arm's length with all parties.
All transactions are conducted at Fair Market Value as determined by a SEBI-registered Registered Valuer. Structures are supported by legal opinions from empanelled senior counsel at AZB & Partners, Cyril Amarchand Mangaldas, and Khaitan & Co.
You don't need to understand the SPV structure, the housing perquisite rules, or the asset exit mechanism. You pick what you want. We set everything up. Your HR just adds one payroll line.
Calculate My Saving →LeaseBridge handles SPV incorporation, NBFC coordination, and compliance documentation end-to-end. Your HR just adds one payroll deduction line.
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