To invest in REITs in India, you open a Demat and trading account with a SEBI-registered broker, complete PAN and KYC, and then buy units of one of the four listed real estate investment trusts on the NSE or BSE the same way you would buy a share. A single unit typically costs a few hundred rupees on the secondary market, so the entry cost is low. What takes more thought is the tax treatment of what the REIT pays you and the risks sitting underneath those steady-looking distributions.
What You’re Buying
A REIT pools investor money to own and operate income-producing commercial property. The trust collects rent, pays expenses, and passes most of what remains to unit holders. You get exposure to institutional-grade real estate without needing crores of rupees to buy a building outright.1Securities and Exchange Board of India. Understanding REITs and INVITs
As of early 2026, four REITs trade on Indian exchanges: Embassy Office Parks, Mindspace Business Parks, Brookfield India Real Estate Trust, and Nexus Select Trust. The first three hold office portfolios. Nexus Select operates retail malls. That is the entire listed universe you can pick from right now.
Accounts and Documents You Need to Open First
Three things have to be in place before you can place a buy order:
- A PAN card. SEBI has required PAN for opening Demat accounts and trading in securities since 2006.2Securities and Exchange Board of India. Mandatory Requirement of Permanent Account Number PAN – Issues and Clarifications
- A Demat account and a trading account, opened through a Depository Participant registered with NSDL or CDSL. Most online brokers open both together.
- KYC verification, which means proof of identity, proof of address, and a photograph. This is a one-time process that most brokers now complete digitally.
If you are an NRI, there is more. You generally need an NRE or NRO bank account at an Indian bank, an NRE-linked Portfolio Investment Scheme (PIS) account for secondary market transactions, and a Demat account with a SEBI-registered broker. All investment funds and repatriated earnings must flow through these designated accounts to comply with foreign exchange rules.
Both resident Indians and NRIs can buy REIT units on the NSE and BSE. Earlier SEBI rules set a ₹50,000 minimum for IPOs and used lot sizes that priced out small investors. Those thresholds have been removed, and you can now buy a single unit on the secondary market.
How to Place the Order
Buying During an IPO
When a new REIT lists for the first time, it opens an IPO window with a set price range. You bid through your brokerage account during the application period, and units are allotted based on demand. IPOs are infrequent in India because only a handful of REITs have come to market so far.
Buying on the Secondary Market
Once listed, REIT units trade on the NSE and BSE like stocks. Search the ticker in your trading app, place a buy order, and the units land in your Demat account. A market order fills at the prevailing price; a limit order lets you cap the price you are willing to pay.
Trades settle on a T+1 basis, so ownership transfers one business day after the trade date.3Securities and Exchange Board of India. Introduction of T+1 Rolling Settlement on an Optional Basis This is the same cycle used for equities.4Securities and Exchange Board of India. Chapter 3 Settlement
Going Through a Fund Instead
If you would rather not pick individual REITs, a few mutual funds and ETFs invest across multiple trusts. These spread your money over different REITs and property types, which cuts concentration risk. You pay fund management fees on top of the REIT’s own expenses, so compare total costs before taking this route.
What It Costs to Trade
Each buy or sell carries the same cost layers as an equity trade. Your broker charges a commission or brokerage fee. Securities Transaction Tax applies to REIT trades on recognized exchanges. You also pay stamp duty, exchange transaction charges, and GST on brokerage. Individually small, these add up with frequent trading. Brokers show a breakup of all charges before you confirm an order.
How Your Returns Will Be Taxed
REIT taxation is more layered than regular stock taxation because your money arrives in two forms: capital gains when you sell, and distributions that themselves split into several components. India’s new Income Tax Act, 2025, which takes effect on April 1, 2026, carries forward the core framework that previously sat under the 1961 Act and Section 115UA.5Press Information Bureau. The Income Tax Act 2025 Reshaping Tax Framework
Capital Gains on Selling Units
The Union Budget 2024-25 reset both the holding period and the rates for listed REIT units. Sell within 12 months of purchase and the profit is a short-term capital gain taxed at 20% under Section 111A. Hold longer than 12 months and the profit is a long-term capital gain taxed at 12.5% under Section 112A, with the first ₹1.25 lakh of long-term gains in a financial year exempt.6Press Information Bureau. New Capital Gains Tax Regime Proposed in the Union Budget 2024-25
Older rules taxed short-term gains at 15% and used a 36-month threshold for long-term classification. Articles still citing those numbers are out of date.
Distribution Income
REIT distributions split into components, and each is taxed differently:
- Dividends. Taxed at your slab rate if the underlying SPV has opted for the concessional corporate tax regime under Section 115BAA. If the SPV pays tax at the regular corporate rate, dividends may be exempt under Section 10(23FD).
- Interest income. Taxed at your slab rate.
- Rental income. Taxed at your slab rate.
- Loan repayment component. The Finance Act 2023 amended this so loan repayment distributions reduce your cost of acquisition. You effectively pay capital gains tax on this amount when you sell the units, not in the year you receive it. If cumulative loan repayments ever exceed your original cost of acquisition, the excess is taxed as income from other sources at your slab rate in the year you receive it.
In practice, a ₹100 distribution might contain ₹40 of rental income, ₹30 of interest, and ₹30 of loan repayment. The first two are taxed now at slab rates; the third reduces your cost basis and is taxed later when you sell. The mix varies by REIT and by quarter, and your tax outcome moves with it.
TDS If You Are an NRI
If you are an NRI, the REIT deducts tax at source before paying you. Dividend income faces 10% TDS and interest income faces 5% TDS. You may be able to claim credit for this TDS when filing in India or in your country of residence under an applicable tax treaty, but the deduction happens automatically.
Rules That Protect Unit Holders
SEBI’s framework sets several hard limits that shape what you own.7Securities and Exchange Board of India. SEBI Board Meeting At least 80% of the trust’s asset value must be in completed, revenue-generating properties, so the bulk of the portfolio is already earning rent rather than riding on future construction. Borrowing is capped at 49% of asset value, which limits the damage from over-leverage during downturns. And at least 90% of net distributable cash flows must be paid out to unit holders on a half-yearly basis. That mandatory payout is the main reason REITs are treated as an income asset rather than a growth one.
Risks to Weigh Before You Buy
REITs are often sold as stable income plays, and the distribution rules do produce reliable cash flow. The underlying asset is still commercial real estate.
Interest rates are the big one. When the Reserve Bank of India raises rates, the REIT’s borrowing costs rise, new acquisitions get more expensive, and bond yields start competing with REIT distribution yields. Indian REITs carry a mix of fixed and variable rate debt, so a hiking cycle squeezes margins. Unit prices tend to fall during these periods even if occupancy holds up.
Vacancy and tenant concentration matter more than many new investors expect. If a major tenant in an office park does not renew, the hit to distributions can be immediate. Industry benchmarks treat occupancy above 85% as a strong portfolio, while occupancy below 60% raises real questions about income stability. Indian office REITs have generally stayed highly occupied, partly because the market has existed during a favorable cycle for commercial real estate.
Choice is limited. With only four listed REITs and three of them office-focused, your portfolio leans heavily on the health of India’s IT services and corporate office demand. You cannot diversify across property types and geographies the way you can in a more mature REIT market.
The tax framework keeps moving. Capital gains rates, holding periods, and the treatment of loan repayment distributions have all been revised since the first REIT listed in 2019. Future budgets can shift the after-tax math again.
Liquidity is better than physical real estate but thinner than large-cap stocks. In volatile periods the bid-ask spread on REIT units can widen, and selling a large holding quickly without moving the price is harder than with heavily traded equities.