1 minute read
Providing tax certainty / widening tax base
from Taxmann's Budget Marathon | Corporate Taxation | E N Dwaraknath & Tapan Gupta – Partner | PwC
by Taxmann
Business Trust
• Currently, rental/interest/dividend income earned by unitholders of REIT/InvIT are directly taxable in the hands of the unitholders and are exempt in the hands of the REIT / InvIT.
• However, other distributions made to the unitholders (primarily arising on account of repayment of debt on loans granted to SPV’s) were not subject to tax at the trust/unitholders level resulting in double non-taxation.
• Repayment of loan by SPVs to REIT / InvIT and subsequent distribution to unitholders now taxable in the hands of unitholders as Income from Other Sources.
• In case of redemption of units, benefit of cost of acquisition can be availed Share issue to non-residents
• Share premium exceeding the FMV received from non-residents by a closely held company taxable [applicable from April 01, 2024]
• Imperative to ensure that any issue of shares by the closely held companies to non-resident shareholders are carried out at the FMV of the shares – Interplay with FEMA provisions
