Government is expected to
give tax benefits to listed Real Estate and Infrastructure Investment Trusts.
According to sources any capital gains tax on units of InvITs would be levied
only at the time of ultimate disposal of the units of the sponsor under the new
norms.
But the sponsor would not be entitled
the concessional Securities Transaction Tax-based capital gains tax regime at
the time of ultimate disposal of the units of the business trust.
Any dividend would be tax exempt in the
hands of the business trust and the dividend component of the income
distributed by the business trust would also be exempt in the hands of unit
holder.
The interest received by REITs or
InvITs from portfolio SPV would be given a complete tax pass-through, while the
portfolio SPV would also be exempted from withholding tax on interest paid to
the business trust. The interest from portfolio SPV too would not be taxable in
the hands of the business trust.
The proposed tax exemptions and
benefits notwithstanding, these new investment instruments would be ‘revenue
accretive’ for the government in the form of additional taxes.
Government is expected to give tax
benefits to listed Real Estate and Infrastructure Invest-ment Trusts. According
to sources any capital gains tax on units of InvITs would be levied only at the
time of ultimate disposal of the units of the sponsor under the new norms.
But the sponsor would not be entitled
the concessional Securities Transaction Tax-based capital gains tax regime at
the time of ultimate disposal of the units of the business trust.
Any dividend would be tax exempt in the
hands of the business trust and the dividend component of the income
distributed by the business trust would also be exempt in the hands of unit
holder.
The interest received by REITs or
InvITs from portfolio SPV would be given a complete tax pass-through, while the
portfolio SPV would also be exempted from withholding tax on interest paid to
the business trust. The interest from portfolio SPV too would not be taxable in
the hands of the business trust.
The proposed tax exemptions and benefits
notwithstanding, these new investment instruments would be ‘revenue accretive’
for the government in the form of additional taxes
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