Sebi will approve guidelines of REITs
The Securities and Exchange Board of India (Sebi) is all set to approve the guidelines for real estate investment trust (REITs) and other infrastructure investment trusts (InvITs) at its board meeting on the August 10 in the capital. The Narendra Modi government had announced plans for such trusts in the July 10 Budget that was presented by finance minister Arun Jaitley.
The trusts will be also allowing the companies that have engaged in infrastructure and real estate to raise long-term resources at competitive rates. The trust structure is looking forward at creating a framework of fasttrack, investment-friendly and predictable public private partnerships (PPPs) to build large-scale projects that are of vital importance for India.
In order to raise long-term capital, the new guidelines will incentivise the creation of such trusts so that investors have a lower tax burden, apart from avoiding the multiple tax processes at different levels. The proposed move will help in unlocking funds from completed projects in infrastructure and real estate. The promoters of such projects, particularly the completed ones, would be able to sell their stake to the trust, which, in turn, can raise long-term, tax-free funds from unit holders. This was stated by an investment banker involved in consultations before the guidelines were drafted.
Source: The Economic Times
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