Taxation issue on REITs and InvITs now resolved

This note provides an in-depth overview of the evolving taxation framework for Indian REITs and InvITs and examines how recent changes have impacted the tax efficiency of these investment structures. It explores the tax treatment of interest income, dividends, repayment of capital and capital gains across the SPV, trust and investor levels. The note also compares post-tax distribution yields across key sectors, including energy, roads, telecom, warehousing and REITs and presents illustrative calculation of the tax burden of returns.