UPSC Exam > UPSC Questions > Consider the following statements with refere...
Start Learning for Free
Consider the following statements with reference to the Real Estate Investment Trust (REIT):
- REITs are only permitted to engage in commercial real estate, not residential real estate.
- Dividends obtained from REITs are completely taxable in the hands of the investor.
- In India, all REITs have to be mandatorily listed on stock exchanges.
How many of the following statements is/are correct?
- a)Only one
- b)Only two
- c)All three
- d)None
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Consider the following statements with reference to the Real Estate In...
Explanation:
Statement 1: REITs are only permitted to engage in commercial real estate, not residential real estate.
- This statement is incorrect. REITs can invest in both commercial and residential real estate properties. In fact, they can also invest in other real estate-related assets such as shopping malls, office buildings, hospitals, etc.
Statement 2: Dividends obtained from REITs are completely taxable in the hands of the investor.
- This statement is correct. Dividends received from REITs are taxable in the hands of the investors as per their respective tax slabs.
Statement 3: In India, all REITs have to be mandatorily listed on stock exchanges.
- This statement is also correct. As per SEBI regulations, all REITs in India must be listed on recognized stock exchanges to provide transparency and liquidity to investors.
Therefore, the correct answer is Option B: Only two.
Statement 1: REITs are only permitted to engage in commercial real estate, not residential real estate.
- This statement is incorrect. REITs can invest in both commercial and residential real estate properties. In fact, they can also invest in other real estate-related assets such as shopping malls, office buildings, hospitals, etc.
Statement 2: Dividends obtained from REITs are completely taxable in the hands of the investor.
- This statement is correct. Dividends received from REITs are taxable in the hands of the investors as per their respective tax slabs.
Statement 3: In India, all REITs have to be mandatorily listed on stock exchanges.
- This statement is also correct. As per SEBI regulations, all REITs in India must be listed on recognized stock exchanges to provide transparency and liquidity to investors.
Therefore, the correct answer is Option B: Only two.
Free Test
FREE
| Start Free Test |
Community Answer
Consider the following statements with reference to the Real Estate In...
- REITS or Real Estate Investment Trust is a company that owns, operates, or finances income-producing real estate properties. They pool money from the investors and invest it in commercial real estate projects like workspaces, malls, etc. Currently, REITs are only permitted to engage in commercial real estate, not residential real estate. Hence statement 1 is correct.
- REITs work like mutual funds. Mutual funds pool money from multiple investors and then invest in various asset classes like equity, debt, gold, etc. Similarly, REITs pool money from various investors and then invest the corpus in income-generating assets. In the return on their investments, REITs receives rental income and interest payment from these properties, which are further distributed to the investors as dividends. As per the SEBI guidelines, they must distribute 90% of their earnings to the investors.
- The REITs are regulated by the Securities and Exchange Board of India (SEBI) through the SEBI (Real Estate Investment Trusts) Regulations, 2014.
- SEBI-mandated criteria that REITs in India need to fulfill in order to qualify are as follows:
- At least 80% of investments made by a REIT need to be in commercial properties that can be rented out to generate income. The remaining assets of the trust (up to the 20% limit) can be held in the form of stocks, bonds, cash, or under-construction commercial property.
- At least 90% of the rental income earned by the REIT has to be distributed to its unitholders as dividends or interest.
- Stock market listing of REIT is mandatory. Hence statement 3 is correct.
- In India too, REITs get a few key tax exemptions that are not available to other types of Real Estate companies:
- Interest payments and dividends received by a REIT from a Special Purpose Vehicle or SPV are exempted from tax. In this context, SPV is a domestic company in which at least a 50% stake is held by the REIT. A REIT can theoretically hold a 50% or higher stake in multiple SPVs that own individual Real Estate properties on behalf of the REIT. Hence statement 2 is not correct. Any income obtained from renting or leasing Real Estate Assets that are owned by the REIT directly (i.e. not through an SPV) is also exempted from tax.
Attention UPSC Students!
To make sure you are not studying endlessly, EduRev has designed UPSC study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in UPSC.
|
Explore Courses for UPSC exam
|
|
Similar UPSC Doubts
Top Courses for UPSCView all
Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?
Question Description
Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for UPSC.
Download more important topics, notes, lectures and mock test series for UPSC Exam by signing up for free.
Here you can find the meaning of Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Consider the following statements with reference to the Real Estate Investment Trust (REIT): REITs are only permitted to engage in commercial real estate, not residential real estate. Dividends obtained from REITs are completely taxable in the hands of the investor. In India, all REITs have to be mandatorily listed on stock exchanges.How many of the following statements is/are correct?a)Only oneb)Only twoc)All threed)NoneCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice UPSC tests.
|
|
Explore Courses for UPSC exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup