Real Estate Industry asks for tax exemptions on REITs

Q: Government should exempt investors from taxes like stamp duty, tax on rent, and transfer of assets and distribution of dividends.

Abhishke Karule, Mumbai

22nd January 2016

Property Tax in Mumbai

stamp duty

real estate investment trust

reits

tax on rent

minimum alternative tax

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Replies (2)

Hi everybody,
Currently, REITs are facing challenges on factors like distribution of 90% of net distributable income after tax to investors; stamp duty charges that can range from 5% to 12% of the property value and minimum alternative tax (MAT), which also discourage developers to firm up REITs plan.

Awar Ali,

22nd January 2016

Comment

@Awar,
disfigurement in yield caused by various tax levels make investors uncomfortable and therefore the government must remove them. With such difficult taxation policies, India could find it difficult to attract foreign investments in this segment.

Rajesh, Delhi-NCR

22nd January 2016

It is just an effort to keep real estate investment trusts (REITS) profitable for the investors and companies, PHD Chamber of Commerce has incited the government to free them from taxes like stamp duty, tax on rent, and transfer of assets and distribution of dividends.

Awar Ali,

22nd January 2016

Comment

Hi Awar,
At the same time, the chamber argued that the cost of taxes reduce valuation of REITs and make them non-profitable and unattractive for investors and corporations.

bachu singh,

22nd January 2016