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Home›India›REITs & InvITs Tax Calculator

REITs & InvITs Tax Calculator India — FY 2025-26

Calculate tax on your REIT and InvIT distributions by income component — interest, dividend, rental, and return of capital. Compare post-tax returns vs FDs and equity. See how return of capital reduces your cost basis and increases capital gains. Updated for Budget 2024 rates and FY 2025-26 TDS thresholds.

Calculate tax on REIT/InvIT distributions by income component
units
Number of REIT/InvIT units you hold
₹
Total annual distribution per unit (check AMC statement)
%
% of distribution that is interest income (from Form 64B)
%
% of distribution that is dividend
%
% that is rental or other business income. Remainder = return of capital
₹
Total annual income (for slab rate calculation)
Most major REITs have SPVs under 115BAA (dividend is taxable)
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How to Use This Calculator

Distribution Tax tab

Enter the number of units held, distribution per unit, and the percentage breakdown of income components (interest, dividend, other/rental). The remainder is treated as return of capital. Select whether the SPV is under Section 115BAA to determine if dividend is taxable. The calculator shows tax on each component at your slab rate and the effective tax rate on total distribution.

REIT vs FD vs Equity tab

Compare post-tax annual income from equal investments in REITs, Fixed Deposits, and Equity. Enter your investment amount, expected yields/returns, and annual income. The calculator applies the correct tax treatment for each — slab rate for FD, partial tax-free for REIT distributions, and LTCG 12.5% for equity — and shows which option gives the highest post-tax income.

Cost Basis Adjustment tab

See how return of capital distributions reduce your cost basis and increase capital gains when you sell. Enter your purchase price, cumulative return of capital received, units, and sale price. The calculator computes the adjusted cost, total capital gain, LTCG tax at 12.5%, and net proceeds after tax.

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The Formula

Distribution Tax:
Tax = (Interest Amount × Slab Rate) + (Dividend Amount × Slab Rate*) + (Other Amount × Slab Rate)
* Dividend taxable only if SPV opted for Section 115BAA. Otherwise exempt.

Return of Capital:
Not taxable at receipt. Reduces cost basis.
Adjusted Cost = Purchase Price − Cumulative Return of Capital

Capital Gains (on sale):
LTCG (>12 months) = Sale Price − Adjusted Cost
Tax = (LTCG − &rupee;1,25,000 exemption) × 12.5% × 1.04 (cess)
STCG (≤12 months) = (Sale Price − Adjusted Cost) × 20% × 1.04

Effective Tax Rate on Distribution:
Effective Rate = Total Tax Paid / Total Distribution Received × 100

TDS (Section 194LBA):
10% on interest/dividend exceeding &rupee;10,000/FY (FY 2025-26 threshold)

Worked Example

Priya — IT professional holding Embassy REIT units

Priya (32) holds 200 units of Embassy Office Parks REIT purchased at &rupee;320/unit. Annual distribution is &rupee;18/unit. The distribution breakdown from Form 64B: 40% interest, 30% dividend (SPV under 115BAA), 10% other income, 20% return of capital. Her annual income is &rupee;15,00,000.

Step 1: Calculate distribution components

Total distribution200 × &rupee;18 = &rupee;3,600
Interest (40%)&rupee;1,440
Dividend (30%)&rupee;1,080
Other income (10%)&rupee;360
Return of capital (20%)&rupee;720 (not taxable)

Step 2: Tax calculation (marginal rate ~20.8%)

Tax on interest&rupee;1,440 × 20.8% = &rupee;300
Tax on dividend&rupee;1,080 × 20.8% = &rupee;225
Tax on other&rupee;360 × 20.8% = &rupee;75
Total tax&rupee;600
Effective rate on distribution16.7%

Step 3: Cost basis adjustment

Original cost&rupee;320/unit
Return of capital received&rupee;3.60/unit (&rupee;720 ÷ 200)
Adjusted cost&rupee;316.40/unit

Verdict: Priya's effective tax on REIT distribution is just 16.7% (vs 20.8% if fully taxable) because the 20% return of capital component is tax-deferred. However, when she sells, her capital gain will be higher by &rupee;3.60/unit due to the reduced cost basis.

REIT/InvIT Tax Rates at a Glance (FY 2025-26)

Distribution component tax treatment
Component Tax Treatment TDS
Interest income Slab rate 10% if >&rupee;10,000/FY
Dividend (SPV under 115BAA) Slab rate 10% if >&rupee;10,000/FY
Dividend (SPV NOT under 115BAA) Exempt Nil
Rental / other income Slab rate 10% if >&rupee;10,000/FY
Return of capital Not taxable (reduces cost basis) Nil
Capital gains tax on REIT/InvIT units (Budget 2024)
Type Holding Period Tax Rate Exemption
LTCG >12 months 12.5% + 4% cess &rupee;1.25 lakh per FY
STCG ≤12 months 20% + 4% cess None

Budget 2024 changed rates from 10%/15% to 12.5%/20% and reduced holding period from 36 months to 12 months. No indexation benefit available.

Indian REITs and InvITs — indicative yields (2025-26)
Name Type Distribution Yield (approx.)
Embassy Office Parks REIT (Office) 6.5–7.5%
Mindspace Business Parks REIT (Office) 6.5–7.5%
Brookfield India REIT REIT (Office) 6–7%
Nexus Select Trust REIT (Retail) 6–7%
IndiGrid InvIT (Power) 10–12%
IRB InvIT InvIT (Roads) 8–10%
PowerGrid InvIT InvIT (Power) 10–12%

Yields are indicative based on recent distributions. Actual yields vary. Check AMC/registrar statements for exact distribution breakdowns.

FAQ

The REIT/InvIT issues an annual statement in Form 64B which provides a detailed breakdown of distributions into interest income, dividend, rental income, other income, and return of capital (debt repayment). This is typically available on the AMC's website, NSDL/CDSL statements, or your broker's annual tax statement. You can also find it in the trust's annual report. For tax filing, this breakdown is essential to correctly report each component under the right income head.
The Form 64B issued by the trust specifies whether the dividend component has been distributed from an SPV that opted for Section 115BAA concessional tax regime. In practice, most major Indian REITs (Embassy, Mindspace, Brookfield, Nexus) have SPVs under 115BAA, which means dividend is taxable at slab rate for unitholders. If in doubt, check the trust's annual report or Form 64B. Your broker's tax statement may also indicate this.
Yes. Long-term capital gains on the sale of REIT/InvIT units (held for more than 12 months) are eligible for the &rupee;1.25 lakh annual exemption under Section 112A (as revised by Budget 2024). This exemption is shared across all assets covered by Section 112A — listed equity shares, equity mutual funds, AND REIT/InvIT units. So if you have &rupee;80,000 LTCG from stocks and &rupee;70,000 from REITs, total is &rupee;1.50 lakh, and only &rupee;25,000 is taxable at 12.5%.
If the cumulative return of capital received exceeds your original purchase price, the excess becomes taxable as income in the year of receipt. For example, if you bought units at &rupee;100 and over the years received &rupee;120 as return of capital, then &rupee;20 is taxable as income in the year the cumulative amount crossed &rupee;100. Your cost basis becomes zero. Any future sale at any price will be entirely capital gain. This scenario is rare for REITs but possible if you hold units for many years.
Yes. REIT and InvIT units listed on recognized stock exchanges (BSE/NSE) are subject to STT on both buy and sell transactions, similar to listed equity shares. The STT rate is 0.001% on the sale value. STT is paid and collected by the broker at the time of trade. The payment of STT is one of the conditions for availing the concessional LTCG rate of 12.5% and STCG rate of 20%. If units are sold off-market (without STT), different (higher) tax rates may apply.

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