Context:
- The National Highways Authority of India (NHAI) said it awarded two highway monetization projects in the toll, operate, and transfer (TOT) mode.
- NHAI has monetised crores of fund though its infrastructure investment trust.
About National Highways Authority of India (NHAI):
- Established in – 1988
- Administrative control – Ministry of Road Transport and Highways.
- Statutory Body – National Highways Authority of India Act.
- Responsivities – develop, maintain and manage the National Highways.
- Consists of – full time Chairman, and not more than five full time Members and four part time Members.
- Appointed by – the Central Government.
- NHAI has – technical, Finance, Administrative and Vigilance Wings.
About Infrastructure Investment Trust (InvITs):
- It functions similarly to a mutual fund.
- Allows both individual and institutional investors to make small contributions towards infrastructure investment and receive a portion of the income as returns.
- Enjoys favorable tax treatment, exemptions from dividend distribution tax and relaxed capital gains tax regulations.
- Made up of four parts: Trustee, Sponsor(s), Investment Manager, and Project Manager
- The minimum investment amount – Rs 10 lakh.
- Regulated by – Securities and Exchange Board of India (SEBI)
Source: Business standard
Previous year question
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? [2023 Prelims]
(a) Both Statement-I and Statement-II are correct, and Statement-II is the correct explanation for Statement-1
(b) Both Statement-I and Statement-II are correct, and Statement-II is not the correct explanation for Statement-1
(c) Statement-1 is correct but Statement-II is incorrect
(d) Statement-I is incorrect Statement-II is correct
