REITs and InvITs Guide for India: Income From Offices, Roads and Power Lines
Last updated: 13 October 2026
Quick answer (InvITs Guide): REITs and InvITs in India are SEBI-regulated listed trusts that own rent-earning offices and malls (REITs) or toll roads, power lines and similar infrastructure (InvITs). They must pay out at least 90% of distributable cash, usually every quarter. You can buy a single unit on NSE or BSE. Payouts mix interest (taxable), dividend (exempt) and debt repayment (tax-deferred).
Last updated: 13 October 2026 Quick answer (InvITs Guide): REITs and InvITs in India are SEBI-regulated listed trusts that own rent-earning offices and malls (REITs) or toll roads, power lines and similar infrastructure (InvITs). They must pay out at least 90% of distributable cash, usually every quarter. You can buy a single unit on NSE or BSE. Payouts mix interest (taxable), dividend (exempt) and debt repayment (tax-deferred). Key takeaways Five listed REITs: Embassy, Mindspace, Brookfield India, Nexus Select and Knowledge Realty Trust. FY26 payouts: over ₹8,900 crore from REITs and ₹22,769 crore from InvITs. Dividend relief: from 1 April 2026, the dividend component stays exempt even if the SPV uses the concessional tax regime. Capital gains: 12.5% after 12 months (above ₹1.25 lakh), 20% within 12 months. SEBI change: REITs count as equity for mutual funds from 1 January 2026; InvITs stay hybrid. Risks: unit prices move with rates and occupancy; payouts are not guaranteed. A retired engineer in Aundh owns a ₹1.2 crore flat she rents out for ₹28,000 a month. That is a rental yield under 3%, before society charges, repairs and the months it sits empty. The same money could own small slices of dozens of Grade-A office towers, leased to global companies, through a listed REIT. This guide explains REITs and InvITs in India as of October 2026: what they are, which ones are listed, how a payout is built, how each part is taxed after the 2026 law change, what SEBI's reclassification of REITs means, the risks, and how they fit a portfolio. InvITs Guide: What is a REIT, and what is an InvIT? A REIT (Real Estate Investment Trust) is a trust that owns completed, income-producing real estate, mainly office parks and shopping malls, and passes most of the rental cash to unitholders. An InvIT (Infrastructure Investment Trust) does the same with infrastructure such as highways, power transmission lines, gas pipelines and telecom towers. Both are regulated by SEBI, under the REIT Regulations, 2014 and InvIT Regulations, 2014. Their units are listed on NSE and BSE and trade like shares. Each trust has a sponsor, an independent trustee and a manager, and the underlying assets usually sit in special purpose vehicles (SPVs) owned by the trust. Comparison of REITs and InvITs in India: assets, income, SEBI classification Key rules that protect unitholders Payout rule: at least 90% of net distributable cash flows must be distributed to unitholders. Most listed trusts pay quarterly. Completed assets: REITs must keep at least 80% of their value in completed, rent-generating properties, limiting construction risk. Small lots: since SEBI's 2021 changes, units trade on the exchange in lots of one unit, so you can start with a few hundred rupees. Leverage caps and valuations: borrowing is capped, and independent valuers value the assets regularly. Which REITs are listed in India? As of October 2026, five REITs are listed. Their combined portfolio covers more than 187 million sq ft, and the Indian REITs Association put sector gross asset value at over ₹2.72 lakh crore in March 2026. REIT Listed Main assets Embassy Office Parks REIT 2019 Office parks in Bengaluru, Mumbai, Pune, NCR; some hotels Mindspace Business Parks REIT 2020 Office parks in Mumbai region, Pune, Hyderabad, Chennai Brookfield India Real Estate Trust 2021 Office campuses in Mumbai, NCR, Kolkata Nexus Select Trust 2023 Shopping malls across Indian cities (India's first retail REIT) Knowledge Realty Trust 2025 Office assets in major cities Together the five paid more than ₹8,900 crore to over 4.25 lakh unitholders in FY26. Embassy alone declared ₹598 crore, or ₹6.31 per unit, for April–June 2026, and guided for ₹27.0–28.6 per unit for FY27. Pune investors will recognise some assets: office parks in Hinjewadi, Kharadi and Yerawada are held by listed REITs. Smaller, single-property trusts are covered separately under SEBI's small and medium REIT (SM REIT) framework (/insights/sm-reits-small-medium-reits-guide) , which needs a ₹10 lakh minimum. Which InvITs can retail investors buy? Some InvITs are publicly offered and listed for retail trading; others are privately placed with institutions. Publicly listed examples include India Grid Trust (power transmission), PowerGrid InvIT, IRB InvIT Fund (toll roads), Bharat Highways InvIT and Capital Infra Trust (roads). The Bharat InvITs Association reported InvIT assets under management of ₹7.1 lakh crore and distributions of ₹22,769 crore in FY26. Infrastructure assets differ from offices in one important way. A toll road or annuity concession usually has a fixed end date, after which the asset passes to the government. Part of each payout is effectively your capital coming back, not just income. Key statistics on the size of the REIT and InvIT market in India How does a REIT payout work? Tenants pay rent to the SPVs that own the buildings. The SPVs pass cash up to the trust in several forms, and the trust distributes it to you with the same labels. That labelling matters because each part is taxed differently. Flow of REIT distribution from tenants through SPVs to unitholders in India Interest: the trust lends to its SPVs; interest on those loans flows to you. Dividend: SPVs pay dividends to the trust out of their profits. Rental income: where the trust owns a property directly, rent flows through. Repayment of debt (return of capital): SPVs repay loans to the trust, and this cash is passed on. Every distribution announcement lists the per-unit amount under each head. The mix varies by trust and by quarter, so check it before estimating your post-tax return. How are REIT and InvIT distributions taxed in 2026? REITs and InvITs are pass-through entities: most income is taxed in your hands, not the trust's. The rules now sit in the Income-tax Act, 2025, which replaced the 1961 Act from 1 April 2026, and Schedule V of that Act governs business trust income. Tax treatment of REIT and InvIT distribution components in India in 2026 Component Tax for resident individual TDS Interest Taxable at slab rate 10% Rental income (direct-held assets) Taxable at slab rate 10% Dividend Exempt (from 1 April 2026, regardless of SPV's tax regime) Check trust's tax note Repayment of debt / other Not taxed on receipt; reduces cost of units. Taxed as other income once cumulative receipts exceed issue price None Sale of units on exchange STCG 20% (up to 12 months); LTCG 12.5% above ₹1.25 lakh (over 12 months) None for residents What changed in 2026 for the dividend component? Earlier, the dividend part was exempt only if the SPV stayed in the normal corporate tax regime. If an SPV opted for the concessional regime, unitholders lost the exemption. The Finance Act, 2026 changed minimum alternate tax rules in a way that could push SPVs into the concessional regime. To protect unitholders, the Taxation and Other Laws (Amendment) Act, 2026, assented to on 17 August 2026 and applying from 1 April 2026, keeps the dividend exempt regardless of the SPV's regime. In exchange, SPVs on the concessional regime pay a higher surcharge of 25% instead of 10%, according to law-firm commentary. Repayment of debt: tax-free, but not forever Since 2023, the repayment-of-debt portion is not permanently tax-free. Each such receipt reduces the cost of your units. Once your cumulative receipts under this head exceed the unit's issue price, the excess is taxed as income from other sources. For long-held units bought at listing, this can eventually matter. Capital gains when you sell Listed REIT and InvIT units held for more than 12 months give long-term capital gains taxed at 12.5% above ₹1.25 lakh a year. That exemption is shared with listed shares and equity mutual funds. Units sold within 12 months attract 20%. Our guide to capital gains tax on shares and tax harvesting (/insights/capital-gains-tax-shares-tax-harvesting) explains how the limit works. Is a REIT better than an FD or a rented flat? It depends on what you need. A worked example shows why the tax mix matters. Suppose you put ₹5 lakh into a REIT that distributes 7% a year, ₹35,000, split 40% interest, 30% dividend and 30% repayment of debt (an illustrative mix). Interest of ₹14,000 is taxed at 31.2% (30% slab plus cess): ₹4,368 of tax. Dividend of ₹10,500 is exempt. Repayment of ₹10,500 is not taxed now but lowers your cost. Post-tax cash: ₹30,632 , about 6.1%. A bank FD at 7% pays ₹35,000, all taxable: ₹24,080 after tax, about 4.8%. The REIT looks better, but it carries price risk and no guarantee. Part of its payout also returns your own capital. Use our FD calculator guide (/insights/fd-calculator-cumulative-vs-payout-tds) to compare your own numbers. Bar chart comparing post-tax income from REIT distributions and fixed deposit interest Feature Listed REIT Rented flat Bank FD Minimum One unit (a few hundred rupees) ₹50 lakh+ in most cities ₹1,000 or so Liquidity Sell on exchange, T+1 Months to sell Premature withdrawal, penalty Income certainty Variable Variable; vacancy risk Fixed for the term Capital value Market-linked Market-linked, illiquid Protected (DICGC up to ₹5 lakh) Management Professional You None needed Diversification Many buildings and tenants One property, one tenant Not applicable For the flat side of this comparison, see our guides to rental income tax (/insights/rental-income-tax-30-percent-deduction-india) and real estate versus mutual funds (/insights/real-estate-vs-mutual-funds-where-should-your-next-20-lakh-go) . What does SEBI's equity reclassification of REITs mean? By a circular dated 28 November 2025, SEBI reclassified REITs as equity-related instruments for mutual funds and SIFs from 1 January 2026. InvITs remain hybrid instruments. Equity funds can now hold REITs within their equity allocation, widening the buyer base. Debt funds can no longer buy REITs. Holdings bought on or before 31 December 2025 are grandfathered, and managers were asked to sell them down gradually. Index inclusion: REITs may be included in equity indices only after 1 July 2026. InvIT limits: a scheme can put up to 5% of NAV in a single InvIT and 10% across InvITs. The change does not alter how you, as a direct unitholder, are taxed. It may, over time, bring more institutional demand for REIT units. Our guide to multi-asset allocation funds (/insights/multi-asset-allocation-funds) explains how some funds use REITs and InvITs. What are the risks of REITs and InvITs? Interest-rate risk: when rates rise, as after the RBI's October 2026 hike to 5.50%, yield-based assets can fall in price. Occupancy and rent risk: office demand depends on IT and global capability centres; mall income depends on consumer spending. Concession and traffic risk (InvITs): toll income depends on traffic; assets may have a finite life. Leverage: borrowing at the trust and SPV level magnifies both gains and losses. Sponsor and governance risk: related-party deals and asset acquisitions from sponsors need scrutiny. Liquidity: some units trade thinly, so large orders can move the price. How to invest in REITs and InvITs: five steps Decide the role. Treat REITs and InvITs as an income-oriented satellite, often 5–10% of a portfolio, not a replacement for debt. Open or use a demat account. Units are bought through any broker on NSE or BSE, or applied for in public offers. Read the latest investor presentation. Check occupancy, weighted average lease expiry, tenant concentration, debt-to-value and distribution mix. Check the distribution history. Look at several years of per-unit payouts and how much was repayment of debt. Track tax properly. Use the trust's annual tax statement to report each component in your ITR and to adjust your cost. For retirees building income, REITs can complement an SWP from mutual funds (/insights/swp-systematic-withdrawal-plan-guide) and senior-citizen schemes. Our retirement income strategy (/insights/retirement-income-strategy-india) guide shows how to combine them. Related reading SM REITs: SEBI's route to fractional commercial property (/insights/sm-reits-small-medium-reits-guide) Fractional real estate in India: benefits, tax and risks (/insights/fractional-real-estate-india-benefits-tax-risks) Pune rental yields by area (/insights/pune-rental-yields-buy-to-let) Bonds 101: G-secs, corporate and tax-free bonds (/insights/bonds-101-india) Retirement income: pension, rent or SWP? (/insights/retirement-income-pension-rent-or-swp-25-years) Frequently Asked Questions How many REITs are listed in India in 2026? Five: Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust, Nexus Select Trust and Knowledge Realty Trust. Four are office-focused and Nexus Select owns shopping malls. Together they paid over ₹8,900 crore to more than 4.25 lakh unitholders in FY26. Small and medium REITs under SEBI's SM REIT rules are a separate category. Is REIT dividend tax-free in India? Yes, the dividend component is exempt for unitholders. From 1 April 2026, the Taxation and Other Laws (Amendment) Act, 2026 keeps it exempt even if the underlying SPV opts for the concessional corporate tax regime. Interest and rental components remain taxable at your slab rate, and repayment of debt reduces your cost of units. What is the minimum investment in a REIT? On the stock exchange, REIT and InvIT units trade in lots of one unit, so you can buy a single unit for a few hundred rupees through any demat account. In a public offer the minimum application is higher, in the ₹10,000–15,000 range. SM REITs require a minimum of ₹10 lakh. Are REITs equity or debt for mutual funds? Since 1 January 2026, SEBI treats REITs as equity-related instruments for mutual funds and SIFs, under its circular of 28 November 2025. Debt funds can no longer buy them, though older holdings are grandfathered. InvITs continue to be treated as hybrid instruments, with per-issuer and overall limits. How is LTCG on REIT units taxed? Listed REIT and InvIT units held for more than 12 months qualify as long-term. Gains are taxed at 12.5% above ₹1.25 lakh in a year, an exemption shared with listed shares and equity mutual funds. Units sold within 12 months are taxed at 20%. Indexation is not available. Which is safer, a REIT or an InvIT? Neither is risk-free. REITs depend on office or retail rents and occupancy, but properties have no expiry date. InvITs often have contracted or regulated income such as transmission tariffs or annuities, but some assets have concessions that end, so part of each payout returns capital. Compare leverage, asset life and payout history. Do REITs and InvITs give regular income? They must distribute at least 90% of net distributable cash flows, and most listed trusts pay quarterly. The amount is not fixed and can fall if occupancy, rents, traffic or tariffs fall, or if interest costs rise. Treat payouts as variable income, not as a fixed deposit substitute. Sources: Taxmann: SEBI reclassifies REITs as equity (circular of 28 Nov 2025) (https://www.taxmann.com/post/blog/sebi-reclassifies-reits-as-equity-instruments-for-mf-and-sif-investments) ; ELP: SEBI tells mutual funds REITs are equity (https://elplaw.in/wp-content/uploads/2025/12/SEBI-tells-Mutual-Funds-henceforth-REITs-are-Equity.pdf) ; Cafemutual: five listed REITs' FY26 distributions (https://cafemutual.com/news/cafe-alt/37789-5-listed-indian-reits-distribute-over-rs8900-crore-to-unitholders-in-fy2026) ; Outlook Business: InvIT FY26 distributions (https://www.outlookbusiness.com/news/infrastructure-investment-trusts-distribute-22800-cr-in-fy26-to-unitholders) ; Mondaq (Shardul Amarchand Mangaldas): REIT and InvIT tax reforms (https://www.mondaq.com/taxing-the-trust-what-indias-reit-and-invit-tax-reforms-mean-for-investors/1839624) ; Upstox: REIT and InvIT dividend exemption explained (https://upstox.com/news/personal-finance/tax/reit-in-vit-dividend-income-what-is-tax-free-under-the-taxation-and-other-laws-amendment-bill-2026/article-198414/) ; Embassy REIT Q1 FY27 distribution (https://www.multibagg.ai/market-pulse/articles/embassy-reit-q1fy27-results-guidance-cmsev0x6k87090zldb3z5zob3) . Worked examples are Money n Wealth calculations. Wondering whether REITs or InvITs fit your income plan? The right mix depends on your tax slab, cash-flow needs and existing property exposure. Talk to Money n Wealth (/contact) for a free portfolio review. This article is for general educational purposes only and does not constitute financial advice. Figures and examples are illustrative. Please consult a qualified financial adviser for guidance specific to your situation. Money n Wealth (Predics Fintech Services Pvt Ltd) is an AMFI-registered Mutual Fund Distributor (ARN-121995) and APMI-registered PMS Distributor (APRN07444); it is not a SEBI-registered investment adviser and may earn distribution commission on investments made through it.
Frequently Asked Questions
How many REITs are listed in India in 2026?
Five: Embassy Office Parks REIT, Mindspace Business Parks REIT, Brookfield India Real Estate Trust, Nexus Select Trust and Knowledge Realty Trust. Four are office-focused and Nexus Select owns shopping malls. Together they paid over ₹8,900 crore to more than 4.25 lakh unitholders in FY26. Small and medium REITs under SEBI's SM REIT rules are a separate category.
Is REIT dividend tax-free in India?
Yes, the dividend component is exempt for unitholders. From 1 April 2026, the Taxation and Other Laws (Amendment) Act, 2026 keeps it exempt even if the underlying SPV opts for the concessional corporate tax regime. Interest and rental components remain taxable at your slab rate, and repayment of debt reduces your cost of units.
What is the minimum investment in a REIT?
On the stock exchange, REIT and InvIT units trade in lots of one unit, so you can buy a single unit for a few hundred rupees through any demat account. In a public offer the minimum application is higher, in the ₹10,000–15,000 range. SM REITs require a minimum of ₹10 lakh.
Are REITs equity or debt for mutual funds?
Since 1 January 2026, SEBI treats REITs as equity-related instruments for mutual funds and SIFs, under its circular of 28 November 2025. Debt funds can no longer buy them, though older holdings are grandfathered. InvITs continue to be treated as hybrid instruments, with per-issuer and overall limits.
How is LTCG on REIT units taxed?
Listed REIT and InvIT units held for more than 12 months qualify as long-term. Gains are taxed at 12.5% above ₹1.25 lakh in a year, an exemption shared with listed shares and equity mutual funds. Units sold within 12 months are taxed at 20%. Indexation is not available.
Which is safer, a REIT or an InvIT?
Neither is risk-free. REITs depend on office or retail rents and occupancy, but properties have no expiry date. InvITs often have contracted or regulated income such as transmission tariffs or annuities, but some assets have concessions that end, so part of each payout returns capital. Compare leverage, asset life and payout history.
Do REITs and InvITs give regular income?
They must distribute at least 90% of net distributable cash flows, and most listed trusts pay quarterly. The amount is not fixed and can fall if occupancy, rents, traffic or tariffs fall, or if interest costs rise. Treat payouts as variable income, not as a fixed deposit substitute.
Wondering whether REITs or InvITs fit your income plan?
The right mix depends on your tax slab, cash-flow needs and existing property exposure. Talk to Money n Wealth for a free portfolio review.
