Real Estate Investment Trust and Infrastructure Investment Trust
to be incentivised
Government has proposed incentives for Real Estate Investment Trusts
(REITs) which will have pass through for the purpose of taxation. Announcing
this during his maiden Budget Speech in the Lok Sabha , the Finance
Minister Shri Arun Jaitley said that REITs have been successfully used as
instruments for pooling of investments in several countries. As an innovation,
a modified REITs type structure for infrastructure projects is also being
announced as Infrastructure Investment Trusts (InvITs) which would have a
similar tax efficient pass through status, for PPP and other infrastructure
projects. These structures would reduce the pressure on the banking system
while also making available fresh equity. Shri Jaitley exuded confidence that
these two instruments would attract long term finance from foreign and domestic
sources including the NRIs.
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