Investors in leasing transactions via Grip become partners in a Limited Liability Partnership (LLP). Any person that earns income/profit by being a partner in a LLP is required to file ITR-3.

As a partner in a LLP, it is mandatory for you to file income tax returns, even if you are earning post tax returns. While there will be no additional tax liability for your returns from investments via Grip, it is mandatory to disclose all sources of income.

The financial year in India begins on the 1st of April and ends on the 31st of March next year. So any income earned/accrued between 1st April 2021 to 31st March 2022, needs to have the income tax returns filed on or before 31st July 2022.

As it is the responsibility of investors to file their own income tax returns, Grip is not authorized to do the ITR filing for investors.

1. The process for filing ITR-3 is the same as other ITRs. The only difference is the form being used. A detailed step-by-step process is mentioned in this Link. Specific inputs related to ITR-3 are mentioned below.
2. Once you have downloaded the ITR-3 excel/xml format from the income tax e-filing portal (Income Tax Portal), fill the information in the ITR-3 on the basis of the Grip Investment Declaration (GID) that will be provided to you by Grip. If you have earned any other income, disclose it in the relevant tabs in ITR-3.
3. Validate all tabs of the ITR-3 form and calculate the tax. The tax from investments via Grip will be nil as profits earned from a LLP are tax exempt.
4. Submit the ITR on the income tax e-filing portal and e-verify it.

In recent years, the government has released new ITR forms and the instructions to file ITR in the month of June i.e. nearly 2 months after the closure of the financial year. Any changes in the ITR form or process can be expected around June 2021.

The decision of filing the ITR should be taken by each and every individual investor. We at Grip will ensure that the process of filing ITR-3 will be as easy as possible by providing you with the Grip Investment Declaration (GID) that reflects your investment via Grip. If this is the only investment that falls under ITR-3, then you can use this to prepare your ITR-3. In case you have other investments, you can use this document in conjunction with the returns from other investments to prepare ITR-3. If you are unsure of filing ITR3 on your own, we recommend that you take professional help to file income tax returns.

There are two types of investment that fall under ITR-3:

1. Quoted Investment (Can be easily accessed from Consolidate Account Statement - CAS) - Examples include mutual funds, Govt. bonds and any long term investments in the money market.
2. Unquoted investment (Can only be known to an individual) - Anything not quoted is an unquoted investment. Examples include investments made in Grip or any other private organizations.

If you have incomes in any of the above categories then you need to include them as part of your ITR-3.

The post tax income that you are earning from LLP is not taxable. However, there are cases where Grip pays interest to the investors due to additional time taken to complete 100% financing of a deal and this interest earned is taxable and needs to be declared in ITR-3. Rest assured, income earned as interest will be part of the GID.

No, income tax paid by LLP is not eligible for refund in the hands of investors.

No, the assets belong to the LLP’s. Any other individual or corporate bodies won’t be able to leverage the depreciation for their tax benefit. The taxes are paid by the LLP after availing the benefit of depreciation on assets, and hence the effective tax on the investor already accounts for the benefit from this depreciation.