Articles, Domestic Tax Policy, Income Tax

Taxation of Income of Securitisation Trusts (SIF)

Chapter XIIEA- Sec 115TCA

Taxation of Income Investor – fund enjoys pass through status

Investment income is exempt for a fund u/s 10(23DA)

As applicable for the investor
Nature of Income Same nature and in the same proportion in the hands of the investor as it is for the securitisation trust
Applicability of distribution tax There shall be no distribution tax on incomes distributed by an investment fund
Deemed distribution of income Any investment income of the investment fund, if not paid or credited to the investor shall be deemed to have been credited to the account of the investor on 31st March of the previous year in which he is entitled to receive
Furnishing information to the investor In prescribed Form within prescribed time
Furnishing information to the Principal Commissioner /CIT In prescribed Form within prescribed time


Securitisation trust means a trust being a:

  • “Special purpose distinct entity” as defined in Securities and Exchange Board of India (Public Offer and Listing of Securitised Debt Instruments) Regulations, 2008 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992) and the Securities Contracts (Regulation) Act, 1956 (42 of 1956), and regulated under the said regulations; or
  • “Special Purpose Vehicle” as defined in, and regulated by, the guidelines on securitisation of standard assets issued by the Reserve Bank of India, which fulfils such conditions, as may be prescribed.
  • “Trust” set up by a securitisation company or a reconstruction company formed for the purposes of Securitisation and Reconstruction of Financial assets and Enforecement of Security Interest Act 2002 or in pursuance of any guidelines or directions issued for the said purposes by the Reserve Bank of India.

Any income which has been included in total income of the investor in a previous year, on accrual basis, shall not be included in the total income of such person in the previous year in which such income is actually paid to him by the investment fund

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