Infrastructure & real estate need booster dose, says EY

The real estate and infrastructure sector has been the backbone of the Indian economy and a major contributor in economic growth of the country. The sector accounts for high inflow of FDI and provides considerable employment opportunities to people in India. Despite its significant influence on GDP of the country, the sector has not been given due thrust and importance in last few years. The NDA government aims to develop ‘smart cities’ around the country and provide ‘housing for all’. Accordingly, there is a need to provide growth and impetus in the sector through introduction of appropriate measures. Hon’ble Finance Minister Arun Jaitley (FM) in his maiden budget last year had brought in few amendments in the existing tax provisions & introduced tax regime for REITs and InvITs. While introduction of tax regime is a positive step towards making REITs/InvITs a reality, there are limitations that need to be addressed before a REIT/InvIT structure is ready to kick-off. Further, ambiguities remain in certain tax provisions which need to be addressed to achieve the required growth in the sector and encourage foreign funds to INVEST in the sector.

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