Form 77 under Section 223: Complete Compliance Guide for Business Trusts and Unit Holders

The Income Tax Act, 2025 has introduced a revised compliance regime for business trusts with the notification of Form 77, a system-generated statement of income distributed to unit holders. This form operates as the successor to Form 64B under the earlier framework and is intrinsically linked to Form 76, which is filed by the business trust.

Form 77 plays a key role in ensuring correct tax reporting for unit holders of Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) registered with SEBI. It is generated electronically and must be furnished to unit holders within a strict statutory timeline under Section 223 and Rule 145 of the Income Tax Rules, 2026.

1. Legal Position and Background

1.1 Evolution from Old Regime to New

Historically, business trusts furnished details of income distributed to unit holders through Form 64B under the Income Tax Rules, 1962, pursuant to Section 115UA of the Income Tax Act, 1961 and Rule 12CA. Under the new law framework:

• Name under Income Tax Rules, 1962: Form 64B
• Name under Income Tax Rules, 2026: Form 77
• Corresponding section in Income Tax Act, 1961: Section 115UA
• Corresponding section in Income Tax Act, 2025: Section 223
• Corresponding rule under Income Tax Rules, 1962: Rule 12CA
• Corresponding rule under Income Tax Rules, 2026: Rule 145

While the core objective remains the same—reporting distributed income from business trusts to unit holders—the new structure brings enhanced clarity, system integration and improved data capture, especially through the parent Form 76.

1.2 Statutory Basis

Form 77 is mandated to be furnished under:

• Section 223 of the Income Tax Act, 2025 – dealing with income distributed by business trusts to unit holders.
• Rule 145 of the Income Tax Rules, 2026 – prescribing Form 77 as the format for the statement of income paid or credited.

The obligation is on the person responsible for distributing such income on behalf of the business trust, generally a trustee or an authorised officer.

2. What is Form 77?

Form 77 is an individualised statement issued by a business trust to each of its unit holders, reflecting income paid or credited to them from the trust during a specified tax year.

In practical terms, it serves as:

• A pass-through income statement for unit holders; and
• A compliance document evidencing that the business trust has duly reported distributed income as required by Section 223.

Form 77 is not an independently filed return or statement with the Income Tax Department; it is a child form generated entirely from details already furnished in Form 76.

Important Note: Form 77 is system-generated only after proper filing of Form 76 by the business trust. No manual preparation or separate online filing of Form 77 is allowed or required.

3. Who is Responsible for Form 77?

3.1 Person Required to Furnish Form 77

The duty to furnish Form 77 lies with:

• The person responsible for distribution of income on behalf of the business trust –
  typically, the trustee, managing trustee, or another authorised signatory.

This applies to all SEBI-registered business trusts governed by:

• SEBI (Real Estate Investment Trusts) Regulations, 2014, and
• SEBI (Infrastructure Investment Trusts) Regulations, 2014.

3.2 Not a Filing by Assessee (Unit Holder)

Unit holders do not file Form 77. Instead:

• Business trust → files consolidated Form 76 with Income Tax Department
• System → generates Form 77 for each unit holder
• Business trust → downloads and furnishes Form 77 to every relevant unit holder

Unit holders then use Form 77 as a reference document when preparing their Income Tax Returns.

4. Time Limit and Frequency

4.1 Period Covered

Form 77 relates to income distributed during a particular tax year by a business trust to its unit holders.