1 What are InvIT's?
An InvIT is a mutual fund that investments in infrastructure
projects as defined by the Ministry of Finance.
2 Where can they invest?
In projects such as these. Source:
3 What is the asset allocation?
There are two types of InvITs.
Public InvITs have to invest greater
than 80% in completed revenue generating projects and not more than 10% in
under construction projects.
Private InvITs can have more than
10% in under construction projects.
4 What is the minimum investment
required?
Public InvITs: 10 Lakh
Private InvITs: 1 Crore
5. Will I get a dividend?
There is no "growth"
option! Twice a year (at least), the public or private InvIT will have to
distribute 90% of the income as a dividend.
6. How are they taxed?
The dividends are tax-free. The dividend distribution
tax associated with them has been scrapped. Moreover, capital gains from units
less than 3 Year old will be taxed at 15%+ cess and above that is tax-free.
7. What are the risks?
In addition to the risks associated with REITs, the
possibility of government intervention is a risk to the amount of income one
can generate with this instrument.
8. What is the structure of an
InvIT?
In addition, the three
entities associated with a RIET, an InvIT also has a project manager to
undertake projects (need to learn more about this).
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