To invest in REITs in India, you open a Demat and trading account with a SEBI-registered broker, complete KYC with your PAN, and buy units of any of the four listed real estate investment trusts on the NSE or BSE the same way you would buy a stock. The minimum purchase is one unit, which usually costs a few hundred rupees, and the units settle into your Demat account one business day after the trade.
What You Are Actually Buying
A REIT is a trust that owns income-producing commercial property, collects rent from tenants, and passes most of what is left after expenses to unit holders. Buying a unit gives you a fractional claim on that rental income and on any appreciation in the underlying properties. It is exposure to institutional-grade real estate without needing crores of rupees to own a building outright.1Securities and Exchange Board of India. Understanding REITs and INVITs
Four REITs currently 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 owns retail malls. Your menu is short, and it leans heavily toward office space.
SEBI also allows a separate class called Small and Medium REITs, but the minimum investment there is ₹10 lakh per unit, so it is aimed at high-net-worth investors rather than the retail buyer picking up units through a regular brokerage app.2Securities and Exchange Board of India. Frequently Asked Questions – Framework for Small and Medium REITs If someone pitches you an SM REIT, know that it is a different product from the four listed REITs described here.
Accounts and Documents You Need
Three things must be in place before your first trade.
- A PAN card. It is mandatory for any securities trading in India and links your investments to your tax record.3Securities 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 set up both together during onboarding.
- KYC verification, which means proof of identity, proof of address, and a photograph. This is a one-time step and most brokers now complete it digitally.
NRIs have more paperwork. You generally need an NRE or NRO bank account with an Indian bank, an NRE-linked Portfolio Investment Scheme account for secondary market transactions, and a Demat account with a SEBI-registered broker. Investment funds and any repatriation must flow through these designated accounts to stay within foreign exchange rules.
How to Place the Trade
Once the accounts are live, you have two direct routes and one indirect one.
Buying in an IPO
When a new REIT lists, it opens an application window with a price band. You bid through your broker during the offer period and units are allotted based on demand. IPOs are infrequent in this market because only a handful of REITs have listed in India to date.
Buying on the Secondary Market
This is how most people actually invest. After listing, REIT units trade on the NSE and BSE like equities. You search for the ticker in your trading app, place a market order for immediate execution or a limit order to cap your price, and confirm. Trades settle on a T+1 basis, so the units appear in your Demat account one business day after the trade.4Securities and Exchange Board of India. Introduction of T+1 Rolling Settlement on an Optional Basis5Securities and Exchange Board of India. Chapter 3 Settlement
Going Through a Fund
If you would rather not choose between the four, some mutual funds and ETFs invest across multiple REITs. You get spread across different trusts and property types in one purchase, but you pay a management fee on top of the REIT’s own costs, so compare total expenses before choosing this over holding units directly.
What It Costs to Buy and Sell
The cost stack is the same as equity trading. Your broker charges brokerage per trade. Securities Transaction Tax applies to REIT unit trades on recognized exchanges. On top of that you pay stamp duty, exchange transaction charges, and GST on the brokerage component. Each line is small on a single trade, but frequent trading adds up quickly. Most brokers show a full breakup on the order confirmation screen before you commit.
How Your Returns Are Taxed
REIT taxation is more layered than equity taxation because your money comes back to you in two forms: capital gains when you sell, and distributions that themselves have multiple components. The core framework carries forward under the Income Tax Act, 2025, which takes effect on April 1, 2026.6Press Information Bureau. The Income Tax Act 2025 Reshaping Tax Framework
Capital Gains When You Sell
The Union Budget 2024-25 reset the numbers. Sell within 12 months and the profit is a short-term capital gain taxed at 20% under Section 111A. Hold longer than 12 months and it 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.7Press Information Bureau. New Capital Gains Tax Regime Proposed in the Union Budget 2024-25 Older guides referencing a 15% short-term rate or a 36-month long-term threshold are out of date.
The Distribution Components
A REIT distribution is not a single type of income. It arrives split into buckets, and each bucket is taxed on its own terms:
- Dividends are taxed at your slab rate if the underlying Special Purpose Vehicle has opted for the concessional corporate tax regime under Section 115BAA. If the SPV pays tax at the regular corporate rate, the dividend may be exempt in your hands under Section 10(23FD).
- Interest income is taxed at your slab rate.
- Rental income is taxed at your slab rate.
- The loan repayment component reduces your cost of acquisition rather than being taxed immediately, so you pay capital gains tax on it when you eventually sell the units. If your 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.
The practical takeaway is that a ₹100 distribution might be ₹40 rental income taxed now, ₹30 interest taxed now, and ₹30 loan repayment that lowers your cost basis and gets taxed later. The exact split varies by REIT and by quarter, and it changes what your effective yield looks like after tax.
TDS for NRI Investors
If you invest as an NRI, the REIT deducts tax at source before paying you. Dividend income faces 10% TDS and interest income faces 5% TDS. You can claim credit for that when you file returns in India or in your country of residence under an applicable tax treaty, but the deduction itself is automatic.
Risks to Weigh Before You Buy
REITs are marketed as stable income assets, and the rule that forces most cash flow out to unit holders does support that. But the underlying asset is commercial real estate, and there are real risks worth pricing in before you buy.
Interest rates are the biggest lever. When the RBI raises rates, borrowing costs for the trust rise, new acquisitions become more expensive, and bond yields start competing with REIT distribution yields. Unit prices on the exchange tend to fall during hiking cycles even when occupancy stays strong.
Tenant concentration matters more than newer investors expect. If a major tenant in an office park does not renew, distributions can move immediately. Industry benchmarks treat occupancy above 85% as a sign of a strong portfolio and occupancy below 60% as a red flag on income stability. Indian office REITs have generally run at high occupancy, but that has coincided with a favorable cycle for commercial real estate.
Choice is limited. With four listed REITs and three of them office-focused, your portfolio leans heavily on the health of IT services and corporate office demand. You cannot spread across dozens of property types and cities the way an investor in a more mature REIT market can.
The tax framework is still being adjusted. Capital gains rates, holding periods, and the treatment of loan repayment distributions have all been revised since the first Indian REIT listed in 2019. Future budgets can shift after-tax returns again.
Liquidity is better than owning a physical building but thinner than large-cap equity. In volatile periods the bid-ask spread on REIT units can widen, and moving a large position quickly without affecting the price is harder than with heavily traded stocks.