The government will provide a uniform tax treatment for InvIT, REIT not listed

NEW DELHI: The government has proposed changes to the Income Tax law to ensure uniform treatment for Infrastructure Investment Trusts (InvIT) and Real Estate Investment Trusts (REIT) that are not listed.

The proposal is part of the finance bill presented in Parliament on Saturday.

The Income Tax Law (I-T) establishes a tax regime for commercial trusts. The definition of a commercial trust means a trust registered as InvIT or REIT under the Sebi market regulator and these units must be listed on a recognized stock exchange.

In this context, the 2020 finance bill said that statements have been received stating that private unlisted InvITs should receive the same status as the listed public InvITs regarding the tax treatments provided for in the Law.

Live plus In addition, Sebi has eliminated the mandatory inclusion requirement of the InvIT and REIT units.

In light of this, it is required that the definition of commercial trusts under the Law be aligned with the modified Sebi Regulation. Therefore, it is proposed to amend clause (13A) of Section 2 of the Law to modify the definition of 'business trust' to eliminate the requirement that commercial trust units be registered in a recognized stock exchange.

This amendment will come into effect from April 1, 2021 and, consequently, will be applied in relation to the 2021-22 evaluation year and subsequent evaluation years, the bill said.