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CMA Intermediate · Direct and Indirect Taxation · Income which does not form part of Total Income

A unit holder receives ₹30 lakh as distributed income from a REIT. Of this, ₹12 lakh is of the nature of interest received by the REIT from a special purpose vehicle, ₹8 lakh is of the nature of rent from real estate assets owned directly by the REIT, and ₹10 lakh is of any other nature. Under Schedule V Sl. No. 5 of the Income-tax Act, 2025, what amount is not included in the unit holder's total income under that entry?

₹10 lakh. The exemption on distributed income from a business trust does not extend to the proportion that is SPV interest (₹12 lakh) or direct rent of a REIT (₹8 lakh). Only the remaining ₹10 lakh is left out of the unit holder's total income.

  1. A₹10 lakhCorrect
  2. B₹30 lakh
  3. C₹18 lakh
  4. D₹20 lakh

Explanation

Sl. No. 5 excludes distributed income but withholds exemption on the proportion that is of the nature of SPV interest and, for a REIT, rent from real estate assets owned directly. Excluded part = 30 - 12 - 8 = ₹10 lakh. ₹18 lakh wrongly removes only the rent... actually it equals 30-12; it ignores the rent restriction.

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