Sebi pitches for tax benefits on REITs, infrastructure bonds

Jun 21 2014, 14:19 IST
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'Sebi will soon finalise norms for REITs, but is awaiting clarity on taxation issues,' says U K Sinha. 'Sebi will soon finalise norms for REITs, but is awaiting clarity on taxation issues,' says U K Sinha.
SummaryTo give a boost to capital markets, Sebi has asked govt to provide clarity on tax benefits for REITs.

Alternative Investment Funds (AIFs), such as venture capital and angel investors.

Sebi came out with a discussion paper on REITs last year and as per the draft norms such trusts would be allowed to list on stock exchanges through Initial Public Offer (IPO) and they can raise funds further through Follow-On Offers.

"We are hoping that we will be able to implement it (REITs regulations) very soon. In developed markets like the US, UK, Singapore and Japan, the REITs have been a significant way for investors to take advantage of growth in the real estate industry," Sinha said.

On one hand, these trusts allow investors to benefit from growth in real estate industry, while on the other hand they also help developers get the necessary funds, he added.

"Our rules are ready and we have taken up with the government that these entities must be given a pass through status so far as tax system is concerned.

"Sebi is hopeful that the government will consider it... Once there is clarity, we will be coming out with our regulations," Sinha said.

"In addition to REITs, we are also working towards infrastructure investment trusts. They will be working on similar principles... For infrastructure investment trusts, we are very close to finalising the regulations. We are in consultations with industry groups," he added.

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