ASSOCHAM welcomes SEBI’s nod on REIT rules

Leading industry body the Associated Chamber of Commerce and Industry of India (ASSOCHAM) has welcomed the approval by market regulator Securities and Exchange Board of India (SEBI) for Real Estate Investment Trust (REIT)’s rules, saying that it would do away with the double taxation of immovable assets like buildings which have rental yield. 

The Secretary General ASSOCHAM D S Rawat, said, that REITs are the key source of funding across world and such initiative would free up capital for new developments. He said REITs will attract $15bn to $20bn which can be used to finance established assets.

He also welcomed the reduction of minimum size of REITs which, he said would allow small developers to float their projects as well for the benefit for small and medium investors. The industry body however, cautioned about not having clarity on taxation such as VAT, stamp duty etc. 

ASSOCHAM also wanted that the ratio of completed and under construction projects needs to be changed from 90:10 to 70:30.

It also suggested that for any project which is about to be completed within one year of floating REITs and having the capacity of income generation within one year should be allowed.