Foreign investors approached the finance ministry seeking tax changes to the current frame work for REITs

Q: Large FDI providers in real estate have approached the finance ministry seeking tax break to the current framework for Indian real estate investment trusts (REITs).

Rituraj,

12th September 2014

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foreign direct investment

reits

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The recently uncovered structure minimizes cash in the hands of shareholders by almost one-fifth compared to a listing in Singapore.

Himani,

12th September 2014

Comment

HI Himani,
REITs allow investors to own shares in rent yielding real estate assets that are listed on the stock market. These investment trusts are touted as being potential game changers for the realty and infrastructure sectors, which are facing liquidity pressures.

Sishir,

12th September 2014

India has the potential to list about 170 million sq-ft of rent-yielding assets through REITs, of the total 370 million sq-ft of Grade A office stock in the country.

Himangi deshmukh, Delhi-NCR

12th September 2014

@Himangi,.
Singapore listed REITs put 19% more cash in the hands of shareholders as compared to an Indian REIT. Singapore shines on account of a lower tax syetem for REITs, which is overall 12.5% less than what the Indian regulator has put in place. Besides the 10% withholding tax, the foreign investors are wary of the 7.5% dividend distribution tax and the 'further income tax' that has been proposed.

Sishir,

12th September 2014

Clarifying the tax structure is of high importance at the moment because a successful India REIT market will require strong support from existing landlords and investors.

Himani,

12th September 2014