Credit rating agency Fitch said on Monday the proposed Securities and Exchange Board of India guidelines on Real Estate Investment Trusts will safeguard investors' interest, but sought clarity on whether such investments would also provide tax benefits.
"The REIT will be a trust under the Indian Trusts Act and the taxation will be at the trust level. But it would be good to clarify if the unit-holder would be exempt from paying tax," it said.
Also, the draft proposal should clarify if properties held in the trust would incur any property taxes, the agency added.
The draft proposal for REITs prepared by the market regulator Sebi is aimed at safeguarding investors' interest. "..in an ideal environment, regulatory restrictions on gearing should not be necessary and that investors should be able to choose the risk-reward parameters