- The govt hopes to use Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts to attract investment in infrastructure and PPP projects. As per the Budget:
- REIT units listed under Stock Exchange will have same taxation regime as that of equity shares and will be subject to securities transaction tax.
- Short term capital gains to be taxed at 15%; long term gains will be exempted.
- The capital gains on disposal of assets by REITs will be taxable at the hands of the trust. When distributed to unit holders, the component of distributed income attributable to capital gains would be exempt in the hands of the unit holder.
- Interest income gained from special purpose vehicle will have ‘pass through’ treatment (no tax on such income in the hands of the trust)
- Income of fund managers will be treated as capital gains and not business income.
- To bring debt schemes on par with other debt instruments and bank deposits, the rate of tax on long-term capital gains on debt mutual funds will be raised to 20% from 10%.
- Indian Depository Receipts (IDRs) will be replaced by the more ambitious and liberal Bharat Depository Receipts.
- Uniform KYC (know your clients) norms and its inter-usability across the financial sector thereby reducing the tedious process of satisfying different KYC norms for the investors.
- Proposal for a single operating demat account, for investors to access and transact all financial assets.
- The financial year 2016-17 has been set as the deadline for companies to adopt Indian Accounting Standards mandatorily. In 2015-16 it will be voluntary.
- Read at:http://www.thehindu.com/todays-paper/tp-business/level-treatment-for-reits/article6199755.ece