Finance Act 2023: How your income from Reits and InvITs will be taxed
Live MintThe amendments to the Finance Bill 2023, passed by Lok Sabha and that received the President’s assent, include changes to the budget proposal pertaining to taxation of real estate investment trusts and infrastructure investment trusts. Now, the ‘loan repayment’ distribution component from Reits and InvITs need not be treated as income from other sources, as stated in the Budget. Before Budget this year, there was no provision in the Income Tax Act for the ‘loan repayment’ component of the distributed income from trusts. The amended tax rules indicate that the amount received as ‘loan repayment’ must be reduced from the cost of acquisition at the time of sale of unit by the investor. Until then, investors in reits/invits has a reason to cheer that income received in the form of ‘loan repayment’ can be charged to tax at a concessional capital gains tax and not the slab rate.
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