New Delhi: Real estate companies are feeling the need to pitch in as competing investment avenues. As a result, the tax structure for Real Estate Investment Trusts (REITs) could be similar to that of equity-based mutual funds which are registered under the Indian Trust Act, 1882.
REIT has to operate as a trust that owns and operates income-generating real estate assets such as shopping centres, hotels and offices.
This will allow small investors to participate in real estate and generate income for shareholders through lease rentals and property appreciation, which is a global practice.
Further, these trusts would be permitted to deduct dividends paid to shareholders from their corporate taxable income.
REITs are expected to be exempt from tax keeping the stockholders paying dividend distribution tax.
REITs would be a huge success in India with the market comprising listed Indian real estate companies estimated to touch the Five billion dollar mark in the next 4 to 5 years, REITs offer a tremendous opportunity.
Firstly let me introduce myself. I am a research analyst for GOAL Group a specialist IT tax provider in the UK. Can you advise the following:-
What rate of withholding tax is deducted on Indian REIT distributions to non residents?
Is the deduction treaty eligible?
Can you advise where I can find a list of Indian REIT companies ( do you have a current list?)