FICCI suggests taxation of real estate investment trusts' income on lines of mutual funds
5 Feb 2008, 1817 Hrs

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New Delhi, Feb 5 (ANI): The Federation of Indian Chambers of Commerce and Industry has advocated for taxation of real estate investment trusts' (REITS) income on the lines of mutual funds and permission to investment in housing development activities.

The group has also come out in favour of exemption of capital gains tax on the sale of assets of REITS and VAT ability of stamp duty payable by a REIT.

The FICCI has suggested that taxation on REITS income should be such that the income gets taxed only once till the stage of its distribution to the end investor. In a mutual fund if it is dividend, the fund pays the dividend distribution tax and there is no tax in the hands of the investors. A similar tax structure should be worked out for REITs as well. Further, it feels that there should be no capital gains tax on sale of assets of REITS, the group said.

Apart from the recommendations on the draft REITS regulation, FICCI has called upon the Union Finance Minister P Chidambaram to do away with the service tax on rental income from commercial property in the ensuing Budget.

While rental income needs to be made tax free, FICCI has called for a duty drawback scheme could be introduced for developers on account of creating affordable housing stock.

The excise duties paid on raw materials such as cement, steel could be paid back. It has also underlined the need for fixing a timeframe by the Central Government in awarding environmental clearance for real estate projects, and that the project completion certificate be given only after obtaining the environmental clearance certificate. (ANI)

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