The Securities and Exchange Board of India’s (SEBI) consultation paper on real estate investment trusts (REITs) and infrastructure investment trusts (InvITs) raised an important question. Should these instruments be given equity classification?
The question is important because while the market regulator treats them as hybrid products, the tax department already gives them equity status. That is, short-term capital gains tax (gains from selling units in less than one year) is at 20%, long-term capital gains tax is at 12.5%.
