Clarity on taxation for REITs from the finance ministry is awaited: Parekh
REITs were announced with a lot of pomp and show during the union budget presented by the Finance Minister Arun Jaitley on July 10. HDFC Chairman Deepak Parekh has urged the Finance Ministry to come up with more clarification on the taxation front for the REITs to be successful.
Parekh termed the budget announcement on giving pass through status to REITs (real estate investment trusts) as a “good beginning”. Since the real estate industry (both residential and commercial) has been going through a slump, Parekh hopes that REITs might give it a boost.
Parekh mentioned that the tax pass through status has been granted to REITs, but there are still some taxation issues related to REITs which are still needed to be clarified by the Finance Ministry.
HDFC is the largest dedicated housing finance player and the shareholders wanted to know if the company was planning to form an REIT to raise funds for their projects. Parekh was replying to the queries from the HDFC shareholders about the budget announcement, and was giving his stand on the launch of REITs.
Parekh mentioned that REITs is a good beginning but still, there are two levels of taxation. So, some clarification is still needed. This route will allow the individual investors to invest in premium projects and the inflation indexing will safeguard his investment too.
Source- The Financial Express
InvIT norms, Real Estate Investment Trusts, REIT, REITs and InvITs, SEBI, Securities and Exchange Board of India
