New Delhi. Warren Buffett, one of the most successful investors in the world, always walk away from Real Estate Investment Trusts (Reits). His company Berkshire Hathaway has negligible stake in the portfolio of Hathway. But this does not mean that reits are also useless for you. In fact, in today’s environment, reits can be a sensible option for your portfolio – especially if you are investing in India.
The story is different in India
Reits in India have emerged as a new but strong option. Here they are regulated by SEBI, and give investors an easy and tax-friendly means of passive income through fare, dividend and capital gains.
Dividend Tax Free: If the Underling Company (SPV) of Reit has already paid corporate tax, then the dividend tax-free received by investors is.
90% distribution mandatory: SEBI rules reits to distribute at least 90% of their net distributable income to divide investors, which guarantees regular income.
The ‘useless’ for buffett, is ‘beneficial’ for you
Reits for big institutional investors like buffett may be unattractive due to insufficient returns and tax problems, but for an Indian retail investor, they present a combination of low risk, good income, and better liquidity. Reit units can be purchased and sold on the stock exchange like a normal share. Also, GST does not have any direct impact on income and TDS also applies to a limited level.
Reits are now gradually becoming the choice of investors in India. Due to more transparency, tax relief, and stable cash flow, these are great options for those who want to earn from the property, avoiding the hassles of physical property.
