Government to give tax benefits to Real Estate and Infrastructure Investment Trusts
Picture used for representational purpose (Photo: DC/File)
New Delhi: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 Taxbased 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.
( Source : dc correspondent )
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