{"id":351734,"date":"2025-12-11T15:52:11","date_gmt":"2025-12-11T10:22:11","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=351734"},"modified":"2025-12-11T15:52:11","modified_gmt":"2025-12-11T10:22:11","slug":"pass-through-tax-status","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/pass-through-tax-status\/","title":{"rendered":"Pass-Through Tax Status"},"content":{"rendered":"<p><strong>News: <\/strong>Asset reconstruction companies (ARCs) have urged the government to extend pass-through tax status to alternative investment funds (AIFs) investing in security receipts (SRs).<\/p>\n<h2>About Pass-Through Tax Status<\/h2>\n<figure id=\"attachment_351735\" aria-describedby=\"caption-attachment-351735\" style=\"width: 418px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"wp-image-351735\" src=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?resize=418%2C170&#038;ssl=1\" alt=\"Pass-Through Tax Status\" width=\"418\" height=\"170\" srcset=\"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?resize=300%2C122&amp;ssl=1 300w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?resize=1024%2C415&amp;ssl=1 1024w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?resize=768%2C311&amp;ssl=1 768w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?resize=1536%2C623&amp;ssl=1 1536w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?resize=1568%2C636&amp;ssl=1 1568w, https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/12\/Source-ET-2.jpg?w=1870&amp;ssl=1 1870w\" sizes=\"auto, (max-width: 418px) 100vw, 418px\" \/><figcaption id=\"caption-attachment-351735\" class=\"wp-caption-text\">Source &#8211; ET<\/figcaption><\/figure>\n<ul>\n<li>Pass-through status is a <strong>tax rule<\/strong> where the <strong>business or fund<\/strong> itself does <strong>not<\/strong> <strong>pay corporation tax on its income.<\/strong><\/li>\n<li><strong>Normally<\/strong>, the same income can be taxed <strong>twice<\/strong> \u2013 once as corporation tax at the firm level and again when it is received by shareholders or investors.<\/li>\n<li><strong>Working mechanism: <\/strong>Under pass-through status, the income generated by the fund (Pass-Through Entities) is <strong>taxed only in the hands of the investor<\/strong>, and the fund (Pass-Through Entities) does not pay tax on that same income.<\/li>\n<li><strong>Purpose: <\/strong>This system is used so that income is <strong>not taxed twice<\/strong> \u2013 it avoids tax at both the fund level and again at the investor level for the same amount.<\/li>\n<li><strong>Examples of Pass-Through Entities: <\/strong>Examples include <strong>sole proprietorships, S corporations, master limited partnerships, limited liability partnerships, and limited liability companies<\/strong>.<\/li>\n<li><strong>Indian Context:<\/strong>\n<ul>\n<li>In 2014, the <strong>Union Budget<\/strong> allowed <strong>Real Estate Investment Trusts (REITs)<\/strong>, which are pooled vehicles for investing in real estate, to have pass-through status.<\/li>\n<li>Asset Reconstruction Companies (ARCs) are currently subjected to a steep <strong>42.74% maximum marginal tax<\/strong> on income from Security Receipts (SRs) at the fund level.<\/li>\n<li>This <strong>high tax rate<\/strong> is viewed as a <strong>deterrent to investment in ARC trusts<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>News: Asset reconstruction companies (ARCs) have urged the government to extend pass-through tax status to alternative investment funds (AIFs) investing in security receipts (SRs). About Pass-Through Tax Status Pass-through status is a tax rule where the business or fund itself does not pay corporation tax on its income. Normally, the same income can be taxed&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/pass-through-tax-status\/\">Continue reading <span class=\"screen-reader-text\">Pass-Through Tax Status<\/span><\/a><\/p>\n","protected":false},"author":10393,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872],"class_list":["post-351734","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/351734","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10393"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=351734"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/351734\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=351734"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=351734"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=351734"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}