For Asset Leasing 

When an individual invests in an asset leasing program via Tap Invest, the individual is essentially starting his/her own rental business. The individual is buying an asset and giving it to a company who uses it and pays the individual monthly lease payments / essentially “rent.”

There are 2 broad ways to arrive at the Taxable Income

1.  PGBP
2. PGBP - Presumptive. 

PGBP Method - In this method, one needs to identify 3 things - Business Income, Expenses, Taxable Income. 

1. Business Income - The monthly rentals you earn is considered as the business income.
2. Expenses - Since the asset is in your name i.e. you own the asset, you have a right to claim depreciation as an expense.
3. Profits - Profit is calculated by doing a subtraction of Business Income and Expenses i.e. Business Income - Expense 

PGBP Presumptive Method - One can opt for presumptive taxation for income earned through leasing from Tap Invest as per Section 44AD in the Income Tax. In order to do so, one needs to fulfil these requirements: 

• Person should be a resident of India (NRI can’t opt for this)
• Turnover Limit – The total amount earned through lease rent should not exceed Rs 2 Cr

    Similar to the previous method, the monthly rentals you earn is considered as the business income.

Arriving at taxable income i.e. the amount on which the investor has to pay tax: 

PGBP Method - Profits that was calculated is considered as taxable income.

PGBP - Presumptive Method - Flat 6% of the Business Income calculated above is considered as the taxable income.

The investor has to pay income tax on the taxable income calculated above as per the tax slab rate they fall under.

For Invoice Discounting 

By investing in invoice discounting through Tap Invest, the individual is essentially providing capital to a company and earns an interest on it. 

The interest income earned by investing in invoice discounting will be considered as Income from Other Sources (IFOS) and shall be taxed at the income tax rate that you fall under. 

For any queries, feel free to mail us on support@tapinvest.in