New Delhi, Aug. 10 -- The Taxation and Other Laws (Amendment) Bill, 2026, passed by the Lok Sabha on 6 August, proposes to extend the dividend exemption to REIT and InvIT unit holders even when the underlying SPV opts for the new tax regime.

If enacted, the change could improve post-tax returns for investors, particularly those in higher tax brackets, while giving them greater certainty over the tax treatment of their REIT and InvIT investments.

Under the current rules, the dividend component of a REIT or InvIT distribution is exempt when the underlying SPV is taxed under the old corporate tax regime. However, if the SPV chooses the new concessional regime, the dividend becomes taxable in the hands of investors at their applicable slab ...