What distinguishes lease transactions from other financing plans, like hire buy, in India? Question 2Answer a. Leases do not require maintenance b. Leases last indefinitely c. Leases are tax-free d. Ownership transfer to the lessee is not permitted in leases
The correct answer is:
d. Ownership transfer to the lessee is not permitted in leases.
In lease transactions, the lessee does not gain ownership of the asset at the end of the lease term, whereas in hire purchase agreements, ownership typically transfers to the buyer after all payments are made.