REITs received a pass-through taxation status
If you have an amount of Rs 2 lakh to invest, your bank may roll out a red carpet, your stockbroker may inundate you with hot tips and the friendly neighbourhood jeweller may even offer a discount on making charges. However, you will probably get laughed out of the estate agent’s office. Not anymore.
With Sebi issuing final guidelines for real estate investment trusts (REITs), you will soon be able to get a piece of the action in the property market with as little as Rs 2 lakh. REITs are just like mutual funds, but instead of using the money collected from investors to buy stocks and bonds, they invest in property. After more than a decade of discussions, this unique form of mutual fund is finally taking shape in India.
Last month, the Union Budget removed an important hurdle by giving pass-through taxation status to REITs. Last fortnight, market regulator Sebi issued final guidelines for REITs, settling several of the concerns raised by the real estate industry. Industry watchers claim that the launch of REITs will increase the flow of funds to the cash-starved real estate industry.
Source: The Economic Times
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