Ahead of the Budget, the Securities and Exchange Board of India (SEBI) has taken up with the government taxation issues for the proposed Real Estate
Investment Trusts as well infrastructure corporate bonds.
"We have come out with a discussion paper on Real Estate
Investment Trust and are hoping to get it implemented soon. Our rules are ready, we have taken up with the government that these must be given a pass-through certificate status so far as tax
status is concerned," SEBI
chairman U K Sinha
said at a summit organised by Skoch Consultancy Services.
Sinha expressed the hope that the government will consider the demand favourably.
"The moment there is a clarity on that, we will come out with our regulations," he said.
Sinha also wanted a tax
clarity on infrastructure corporate bonds
for foreign institutional investors (FIIs).
"In the infrastructure sector, if a bond is issued and there is a FII, which is investing in that, what is the level of tax
with that entity? If it is vastly different from the withholding tax
which is imposed on others, should there be different set of rules for FIIs and domestic institutional investors? These are the issues we are looking at," Sinha said.
He also wanted the government to enact a law to replace an ordinance which provides SEBI
the regulatory jurisdiction of all unregulated entities that take deposits of at least Rs 100 crore.
"An ordinance is an ordinance. It has a limitd life. I am hopeful that the government will consider that this ordinance is converted into an act very soon," he said.
chairman said there are still a large number of unregulated fund raising activities. These are coming under various names--chit funds or nidhi companies, housing schemes.
"That menace has not still been fully controlled."
Sinha disclosed that since the ordinance was promulgated, SEBI
has taken action in more than 25 cases. "We have passed our orders, we have stopped them from raising money."