Status quo for investment trusts likely on tax front

India is examining whether a carveout can be provided to real estate and infrastructure investment trusts (REITs, InvITs) under the proposed regime for taxation of dividends.

The budget proposes to scrap dividend distribution tax (DDT) and shift the taxation of such payouts to recipients.

Industry has already taken up the issue with the government as it could adversely impact these increasingly popular investment vehicles for the real estate and infrastructure sectors that rely on steady dividend income.

Moreover, sections within the government are also worried that the move could impact its own asset-monetisation plan, especially in the roads sector.

“There have been representations — the issue is being examined,” a senior government official said.


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