How are REITs taxed?

In India, Real Estate Investment Trusts (REITs) are governed by the Securities and Exchange Board of India (SEBI) and are taxed as per the Income Tax Act, 1961.

REITs are required to distribute at least 90% of their net distributable income to their unit holders, and this distribution is taxable in the hands of the unit holders as per their respective tax slab rates. The REIT itself is not subject to tax on the income that is distributed to its unit holders.

In addition to the income tax, there is also a Goods and Services Tax (GST) that is levied on the supply of services by the REITs. The rate of GST is currently set at 18%.