Latest Expert Exchange Queries

GST Demo Service software link:
Username: demouser Password: demopass
Get your inventory and invoicing software GST Ready from Binarysoft
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing | GST - Goods and Services Tax
Popular Search: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: empanelment :: ACCOUNTING STANDARD :: ARTICLES ON INPUT TAX CREDIT IN VAT :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: TDS :: articles on VAT and GST in India :: VAT Audit :: form 3cd :: cpt :: VAT RATES :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4%
Direct Tax »
 Filing tax return before March 31? Here is what you should do and what not
 CBDT invites suggestions to draft new Direct Tax Law
 Deadline For Income Tax Returns Filing Only 12 Days Away. 10 Points
 Income Tax: E-assessment ensures greater efficiency in the taxation system
 10 Points Deadline For Income Tax Returns Filing Only 2 Weeks Away.
 Income tax returns (ITR) filing: A step by step guide to check your ITR status online and offline
 How to save tax; amazing tips to make your money stay in your wallet Income tax returns (ITR) filing
 Want to save tax? Here are the best options
 Suggestion For Option To Assessee For Higher And Lower TDS/TCS For Optimization Of Tax Collection And Refunds
 CBDT to conduct nationwide review of tax collection for FY18 today
 Here are a few last-minute tax saving ideas Not planned taxes yet?

Realty MFs stuck on unclear tax rules
July, 20th 2008

At a time when the real estate sector is hard-pressed for funds, the real estate mutual funds (REMFs) are yet to take off, despite being granted permission three months ago. This is because of unclear rules regarding their tax treatment.

REMFs, which were touted as a major instrument enabling retail investors to participate in the booming realty sector, have been delayed partly because the Securities & Exchange Board of India (Sebi) and the finance ministry are still trying to sort out the taxability of such scheme.

The Central Board of Direct Taxes (CBDT) has agreed to provide it the same tax status as the equity oriented mutual funds, as was requested by the Sebi. This implies that the REMFs will be exempted from dividend distribution tax and investors spared from paying long-term capital gains while selling their shares.

However, according to the Income Tax Act 1961, equity oriented mutual funds are those which have at least 65% direct investment in securities of the listed companies.

Interestingly, under Sebis guidelines, REMFs must invest a minimum of 35% of their funds directly into real estate assets and the rest into mortgage-backed securities, debt and equity instruments floated by the realty companies, thereby making it difficult for them to qualify as equity oriented mutual funds.

As per the REMF structure laid out by Sebi, these funds would more-often-than-not be akin to debt funds, an expert said. Unlike equity-linked funds, debt-funds attract both capital gains tax and dividend distribution tax. This creates complications as investors are indirectly being denied the tax incentives given to equity oriented funds, the officials said.

For a clearer understanding and in order to include REMFs, the finance ministry will have to change the definition of equity oriented mutual funds in the IT Act, Ajit Krishnan tax partner (real estate), Ernst & Young said. He added there were other issues, which were delaying the launch of such schemes.

Analysts note that apart from taxation issues, the instrument is not gaining currency because of a weak stock market. Stocks of real estate companies have been battered badly in the recent months. The outlook for real estate sector is so bleak that no one wants to float REMFs, says Dhirendra Kumar, CEO, Value Research India Pvt Ltd, a mutual fund research firm.


Home | About Us | Terms and Conditions | Contact Us
Copyright 2018 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Web Application Development Web based Software Solution Web Application Deployment Web Application Solutions Web Application Software Development Web Application Deployment Web Application Programming Web Application Design and Development

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions