Tax on income of Unit Holder and Business Trust - Section 115UA - Income Tax - Ready Reckoner - Income Tax

Tax on income of Unit Holder and Business Trust - Section 115UA Notwithstanding anything contained in any other provisions of this Act, any income distributed by a business trust to its unit holders shall be deemed to be of the same nature and in the same proportion in the hands of the unit holder as it had been received by, or accrued to, the business trust. Subject to the provisions of section 111A and section 112 , the total income of a business trust shall be charged to tax at the maximum marginal rate. If any previous year, the distributed income or any part thereof, received by a unit holder from the business trust is of the nature as referred to in section 10(23FC) , then such distributed income or part thereof shall be deemed to be income of such unit holder and shall be charged to tax as income of the previous year. The provisions of section 115UA(1) shall not apply in respect of any sum referred to in section 56(2)(xii) , received by a unit holder from a business trust. [Sub-section (3A) inserted vide Amendment to FA, 2023 ] Taxability in hands of Business Trust (REIT/Invit) Interest Dividend received from SPV shall be fully exempt under section 10(23FC) . Rental Income of REIT from renting/leasing/letting out any Real Estate Asset owned by REIT shall be exempt under section 10(23FCA) . Long term Capital gain income of business trust shall be taxable If equity oriented or equity oriented mutual fund then shall be taxable Listed :- under section 112A @10% in excess of Rs.1,00,000. Unlisted :- Under section 112 @20% If other capital assets (equity oriented or equity oriented mutual fund) shall be taxable under section 112 @20% (with Indexation) Short term capital gain income of business trust shall be taxable Listed shares :-under section 111A @15% Unlisted shares :- Under section 115UA @ 42.744%. All other Income (except covered in above) of business trust shall be taxable @MMR in hands of Business Trust i.e. @42.744% Taxability in hands of Unit Holders Interest Dividend received by unit holders from Business Trust shall be taxable in hands of Unit Holders at following rates:- Resident - Normal Tax Rates Non-Resident/ Foreign Company - For Interest @ 5%, For Dividend @10% Rental Income received by Unit Holders from REIT shall be taxable in hands of Unit Holders as it was exempt in hands of REIT under section 10(23FCA) at normal tax rates in all cases weather Resident/Non-Resident/Foreign Company. Long term capital gain on transfer of unit of Business Trust (listed in recognised stock exchange STT paid thereon). shall be taxable under section 112A @10% in excess of Rs.1,00,000. Short term capital gain on transfer of unit of Business Trust (listed in recognised stock exchange STT paid thereon). shall be taxable under section 111A @15%. Any other income (except covered in above) received by unit holders from Business Trust shall be exempt in hands of Unit Holder under section 10(23FD) . Dividend received by unit holder from business trust On which SPV has paid taxes u/s 115BAA @22%) shall be taxable. IF SPV paid taxes as per normal provision of income tax (Not opted to pay u/s 115BAA ) then dividend from SPV shall be exempt in hands of Business Trust u/s 10(23FC) in hands of Unit Holder s u/s 10(23FD) . Furnishing a Statement of income distributed by a business trust to its unit holder [ Section 115UA(4) and Read with Rule 12CA ] Any person responsible for making payment of the income distributed on behalf of a business trust to a unit holder shall furnish a statement to the unit holder and the prescribed authority, within such time and in such form and manner as may be prescribed, giving the details of the nature of the income paid during the previous year and such other details as may be prescribed. [ Section 115UA(4) ] w.e.f. 19.01.2015 (1) The statement of income distributed by a business trust to its unit holder shall be furnished to the Principal Commissioner or the Commissioner of Income-tax within whose jurisdiction the principal office of the business trust is situated, by the 30th November of the financial year following the previous year during which such income is distributed,: the statement of income distributed shall also be furnished to the unit holder by the 30th June of the financial year following the previous year during which the income is distributed. (2) The statement of income distributed shall be furnished under section 115UA(4) by the business trust to - (i) the Principal Commissioner or the Commissioner of Income tax referred to in rule 12CA(1), in Form No. 64A , duly verified by an accountant in the manner indicated therein and shall be furnished electronically under digital signature; (ii) the unit holder in Form No. 64B , duly verified by the person distributing the income on behalf of the business trust in the manner indicated therein. (3) The Director General of Income-tax (Systems) shall specify the procedure for filing of Form No. 64A and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements so furnished. [ Inserted vide Notification 03/2015 - Dated 19-1-2015 ] W.e.f. 24.02.2025 (1) The statement of income distributed by a business trust to its unit holder shall be furnished by the person responsible for making payment of the income distributed on behalf of a business trust to (i) the Principal Commissioner or the Commissioner of Income-tax, as the case may be, within whose jurisdiction the principal office of the business trust is situated by the 15th day of June of the financial year following the previous year during which the income is distributed electronically under digital signature, in Form No. 64A duly verified by an accountant in the manner indicated therein; and (ii) the unit holder by the 30th day of June of the financial year following the previous year during which the income is distributed in Form No. 64B after generating and downloading the same from the web portal specified by the Principal Director General of Income-tax (Systems) or the Director General of Income-tax (Systems) or the person authorised by him and duly verified by the person paying the income distributed on behalf of the business trust in the manner indicated therein. (2) The Principal Director General of Income-tax (Systems) or the Director General of Income tax (Systems), as the case may be, shall specify,- (i) the procedure for filing of Form No. 64A and shall also be responsible for evolving and implementing appropriate security, archival and retrieval policies in relation to the statements of income paid so furnished under this rule; and (ii) the procedure, formats and standards for generation and download of statement in Form No. 64B from the web portal specified by him or by the person authorised by him and he shall be responsible for the day-to-day administration in relation to the generation and download of certificates from the web portal specified by him or the person authorised by him. [ Substituted vide Notification No. 17/2025 dated 24-02-2025 ] Important Notes SPV means Indian Company in which Business Trust holds controlling Interest any specific percentage of shareholding. (currently 50% or more) Income distributed by Business trust to its Unit Holders shall be of the same nature in the same proportion in hands of Unit Holders as it had been received by Business trust - Section 115UA