Government has proposed incentives for Real Estate Investment Trusts(REITs) which will have pass through for the purpose of taxation. Announcing this during his maiden Budget Speech in the Lok Sabha today, the Finance Minister Shri Arun Jaitley said that REITs have been successfully used as instruments for pooling of investments in several countries. As an innovation, a modified REITs type structure for infrastructure projects is also being announced as Infrastructure Investment Trusts (InvITs) which would have a similar tax efficient pass through status, for PPP and other infrastructure projects. These structures would reduce the pressure on the banking system while also making available fresh equity. Shri Jaitley exuded confidence that these two instruments would attract long term finance from foreign and domestic sources including the NRIs.
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