The Securities and Exchange Board of India (SEBI), on Monday, pitched for tax incentives to woo investors into the proposed real estate investment trusts (REITs), which, it was felt, would go a long way in helping cash-strapped companies raise funds.
“For REITs to be successful, they have to be tax efficient. We will ask the tax authorities to consider some incentives for the real estate investment trusts,” SEBI Chairman U. K. Sinha told reporters on the sidelines of a conference here.
“We will talk to the Income Tax department to make it happen,” he added.
SEBI has recentlyissued draft guidelines to allow REITs. This is expected to pep up the cash-strapped realty sector with capital infusion in the form of REITs.
In its draft regulations,, SEBI has broadly applied a framework similar to that of an initial public offers (IPOs), requiring listing of units issued by REITs. The regulator has also prescribed various norms, including those related to minimum offer size, public float, and size of assets.
REITs are proposed to be allowed to list on exchanges through IPOs and through follow-on offers and raise funds. Globally, framework for REIT exists in several countries including the U.S., Britain, Australia, and France.