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Which one of the following is correct in respect of the Infrastructure Investment Trusts?
Infrastructure Investment Trusts (InVITs) gather funds from investors, which are subsequently directed into infrastructure projects. As pooled investment vehicles, they function similarly to mutual funds. However, while mutual funds predominantly invest in stocks and bonds, InVITs focus on infrastruRead more
Infrastructure Investment Trusts (InVITs) gather funds from investors, which are subsequently directed into infrastructure projects. As pooled investment vehicles, they function similarly to mutual funds. However, while mutual funds predominantly invest in stocks and bonds, InVITs focus on infrastructure-related ventures. The returns generated by InVITs are distributed to investors through four primary methods: interest on capital, dividends, rental income, and repayment of capital. Previously, interest, dividends, and rental income earned by unit holders were taxable, but repayment of capital was exempt from tax. However, the Finance Act of 2023 introduced a provision to tax certain portions of capital repayment in specific cases, making Statement 1 incorrect. Additionally, the Finance Act of 2021 amended the SARFAESI Act of 2002 to recognize pooled investment vehicles, including REITs and InVITs, as borrowers under the Act, making Statement 2 correct.
Therefore, the correct answer is Statement-I is incorrect but Statement-II is correct.
See lessConcept of Scarcity
Scarcity is a fundamental concept in economics that arises because resources are limited while human wants are virtually unlimited. This imbalance forces individuals, businesses, and governments to make choices about how to allocate resources efficiently. Scarcity drives the need for trade-offs andRead more
Scarcity is a fundamental concept in economics that arises because resources are limited while human wants are virtually unlimited. This imbalance forces individuals, businesses, and governments to make choices about how to allocate resources efficiently. Scarcity drives the need for trade-offs and prioritization, which are central themes in economics. Economists study how these decisions are made and the resulting impact on production, distribution, and consumption.
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