Quick Summary
Rationalisation in taxation of Business trusts Finance (No.2) Act, 2014 introduced a special taxation regime for Real Estate Investment Trust (REIT) and Infrastructure Investment Trust (InVIT) [commonly referred to as business trusts]. The special regime was introduced in order to address the challenges of financing and investment in infrastructure. The business trusts invest in special purpose vehicles (SPV) through equity or debt instruments. 2. Keeping in mind the business structure, the
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FAQ :
The special taxation regime was introduced to address challenges in financing and investment, particularly in infrastructure, and provides a pass-through status for certain income types for REITs and InvITs.
Business trusts generally have a pass-through status for interest income, dividend income received from a special purpose vehicle, and rental income (in the case of REITs).
The previous version of Section 115UA(2) did not explicitly mention Section 112A, which deals with tax on long-term capital gains on certain assets.
The amendment proposes to include Section 112A within Section 115UA(2), ensuring that long-term capital gains are correctly accounted for under the business trust tax regime.
These amendments will take effect from 1st April 2026, applying to assessment year 2026-27 and subsequent assessment years.
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