UPSC Prelims 2023·GS1·economy·money and banking

Consider the following statements: Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (InvITs) distributed to their investors is exempted from tax, but the dividend is taxable. Statement-II: InvITs are recognized as borrowers under the 'Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002'. Which one of the following is correct in respect of the above statements?

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Last updated 23 May 2026, 3:31 pm IST
  1. ABoth Statement-I and Statement-II are correct and Statement-II is the correct explanation for Statement-I
  2. BBoth Statement-I and Statement-II are correct and Statement-II is not the correct explanation for Statement-I
  3. CStatement-I is correct but Statement-II is incorrect
  4. DStatement-I is incorrect but Statement-II is correctCorrect

Explanation

Statement-I is incorrect. Interest income from Infrastructure Investment Trusts (InvITs) distributed to investors is taxable under the Income Tax Act. The Finance Act 2023 further clarified that all InvIT distributions, including interest, are subject to tax. Statement-II is correct. InvITs are recognized as borrowers under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002. Since Statement-I is incorrect and Statement-II is correct, the answer is D.
economy: Consider the following statements: Statement-I: Interest income from the deposits in Infrastructure Investment Trusts (I
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