REIT & InvIT Tax Cut: What You Gain in 2025

Parliament passed a bill easing taxes on REITs and InvITs. The special purpose vehicles inside these trusts can now use concessional tax rates and MAT credits, potentially meaning more money flows to unit-holders like you.

Here's what happened: Lok Sabha passed the new Income Tax Bill allowing REIT and InvIT SPVs to access the concessional 15% corporate tax rate previously unavailable to them.. SPVs inside these trusts can now utilise accumulated MAT credits, reducing their current tax liability and freeing up more cash for distributions to unit-holders.. The existing dividend exemption for individual REIT and InvIT unit-holders remains unchanged — retail investors continue to receive distributions without additional tax at their end..

What you should do: Check the annual report or factsheet of any REIT or InvIT you hold to see how much of its income flows through SPVs — a higher SPV share means you benefit more from this tax change.. Compare distribution yields of listed REITs (Embassy, Mindspace, Nexus) and InvITs (IndiGrid, PowerGrid InvIT) now that SPV tax costs may fall — yields could improve over the next 1–2 distribution cycles.. Avoid confusing this SPV-level tax change with your personal tax on REIT/InvIT income — interest and amortisation components you receive are still taxable in your hands; only the dividend portion stays exempt..

REITs must distribute at least 90% of net distributable cash flows — so any tax saving at the SPV level legally must flow almost entirely to you, not be retained by the trust.

For readers weighing their credit and loan options, our personal loan guide and CIBIL score resources put this update in context.