Hi @Quicko, can you please tell how does the taxation work on REIT’s and InvIT’s? How are the returns from selling these instruments and dividends we receive are taxed, etc.
Hi @Parth111
- Transfer of units by unit-holders shall be chargeable to Capital Gains Tax at applicable rates.
- Any short-term capital gains arising on the transfer of units shall be chargeable to tax at 15 percent. Long-term capital gain is taxable at 10% if the amount exceeds INR 1 lakh.
- Unit-holders receiving any income distributed by trusts such as interest or dividend shall be treated as income of the unit-holder for that previous year.
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@Quicko is correct about taxes which arises when you transfer the units. They are incorrect about the distributions. The Quarterly distribution has 3 components. Not all of them are taxable… Only interest component is taxable, rest is tax free. Please read the Quarterly factsheets of the REITs to get more idea…
In the buyback offer by the company ; the shareholder participating , will not bear any capital gain tax . And . But . Instead . The company bears the tax !
Is it true ?
If it is true then isn’t it unfair on the part of the existing shareholders , promoters , of the company ?
Commercial property tax , fees , charges etc are more , compare to the residential property!
Is it so ?