REITs vs REIT mutual funds vs physical property: A complete guide to capital gains tax, TDS and post-tax returns

For listed REITs and REIT mutual funds, long-term capital gains (hold >12 months) are taxed at 12.5%, short-term at 20%.

Direct property must be held for over 24 months to qualify for long-term capital gains tax treatment, also at 12.5%.

REIT interest and dividend income is taxable at the investor's slab rate; the capital repayment component is not taxed but reduces acquisition cost.

REIT mutual funds are not taxed on interest and dividend income received from underlying REITs at the fund level.

TDS on REIT distributions is 10% for residents; direct property rental income TDS rules differ.