OPEX vs CAPEX for Laptops: How to Compare (Worked Framework)
Use this framework to compare laptop rental (OPEX) with purchase (CAPEX) over three years. Both routes are eligible for GST input tax credit, but the cash flow, depreciation and balance-sheet effect differ. Put your own quotes into the formula below.
The variables
- Number of laptops (N)
- Tenure in months (T)
- Monthly rental per unit (R) — request quote
- Purchase price per unit (P)
- GST rate: 18% (SAC 997315 for rental, HSN 8471 for purchase)
- Income Tax rate (corporate): typically 25.17% under Section 115BAA
- Depreciation rate (WDV): 40% under Income Tax Rules for computers
- Residual value of purchased unit at month 36 (V)
Simplified formula (3-year horizon)
OpEx (Rental):
Total cash outflow = N × R × 36
Less ITC recovered = (N × R × 36) × 18%/118%
Less Tax saved (Section 37) = (Net cost) × 25.17%
= 3-year net cost (Rental)
CapEx (Purchase):
Initial outflow = N × P × 1.18 (incl GST)
Less ITC recovered = (N × P) × 18% (Day 0)
Less Depreciation tax shield (3 yr, 40% WDV) = ~78% of purchase × 25.17% over 3 years
Plus residual sale value at month 36 = N × V
= 3-year net cost (Purchase)
Example (illustrative — request quote for actuals)
| Scenario | Fleet | Cash impact (Y1) | Balance sheet |
|---|---|---|---|
| Rental (OpEx) | 50 units × 36 months | Smooth monthly outflow | Off-balance-sheet (typically) |
| Purchase (CapEx) | 50 units outright | Large Y1 outflow, then minimal | Asset on balance sheet, depreciating |
This is a directional framework, not tax advice. Actual numbers depend on the rental rate, the purchase price and your tax position; check the treatment with your CA.
Frequently asked questions
Is laptop rental OpEx or CapEx in India?
Laptop rental is treated as OpEx. The full monthly rental is deductible as a business expense under Section 37(1) of the Income Tax Act, and the 18% GST charged under SAC 997315 is eligible for input credit if your business is GST-registered and the rental is for taxable supplies.
What's the depreciation rate for purchased laptops?
For tax, the Income Tax Rules depreciate computers at 40% a year on the written-down value (WDV). For company accounts, Schedule II of the Companies Act 2013 gives end-user devices such as laptops a useful life of 3 years. The asset stays on the balance sheet until it is written off or sold.
Which is better — rent or buy?
It depends on cash flow, refresh cycle and tax position. Rental tends to suit growing teams, fleets refreshed within three years and businesses that want to keep cash free. Purchase suits stable fleets where laptops will be kept for many years.
Can a startup claim full GST input credit on laptop rental?
Yes, provided the startup is GST-registered, makes taxable outward supplies (most B2B startups do), and the rental is used in the course of business. Reconciliation happens automatically via GSTR-2B against the rental vendor's GSTR-1 filing.
Does Ind AS 116 affect laptop rental treatment?
For Ind AS-applicable entities (typically large companies), short-term rentals (under 12 months) and low-value asset exemptions can keep laptop rentals off-balance-sheet under Ind AS 116. Mid-tier rentals (12-36 months) may require ROU asset and lease liability recognition. Your CA should validate based on tenure structure.
Last updated: 26 September 2026
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