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What is business trust? A business trust is generally formed as a trust structure rather than a company. It pools capital from investors and invests in income-generating assets like real estate or infrastructure projects. Examples include: A business trust is a legal arrangement in which a trustee
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A business trust in India is a trust structure that pools capital from investors to invest in income-generating assets like real estate or infrastructure projects, rather than being formed as a company.
The main types of business trusts discussed are Real Estate Investment Trusts (REITs), which invest in income-generating real estate, and Infrastructure Investment Trusts (InvITs), which invest in infrastructure assets.
Key features of a REIT in India include being a trust registered with SEBI, investing in income-generating real estate, distributing returns as dividends and capital appreciation, and having a minimum investment typically between Rs 10,000-Rs 15,000.
Key features of an InvIT in India include being a trust regulated by SEBI, pooling capital for infrastructure assets like roads or power lines, with minimum investments for public InvITs around Rs 10,000-Rs 15,000.
In India, REITs are taxed at the REIT level on rental income and capital gains, while unit holders are taxed on interest, dividend (if applicable), and capital gains from selling REIT units, with specific TDS rates.
In India, InvITs are taxed at the InvIT level on capital gains, while unit holders are taxed on interest income and capital gains from selling InvIT units, with specific TDS rates applicable.
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