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About Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs):
- Real Estate Investment Trusts (REITs):
- REITs are companies that own, operate, or finance income-producing real estate across a range of property sectors.
- They allow individual investors to earn a share of the income generated through commercial real estate ownership without having to buy, manage, or finance any properties directly.
- In India, REITs were introduced in 2014.
- Regulated by the Securities and Exchange Board of India (SEBI).
- Returns on capital by REITs taxable in the hands of unitholders.
- Infrastructure Investment Trusts (InvITs):
- InvITs on the other hand, are similar investment vehicles focused on infrastructure projects.
- They allow investors to invest in a diversified portfolio of infrastructure assets, such as toll roads, power plants, and pipelines.
- InvITs were introduced in India in 2016 to attract long-term capital for infrastructure development.
- Regulated by the Securities and Exchange Board of India (SEBI).
- InvITs have been classified as ‘borrowers’ under Section 2(f) of the SARFAESI Act.
- Returns on capital by REITs, InvITs taxable in the hands of unitholders.
Why in News?
- The Securities and Exchange Board of India (SEBI) proposed a framework for undertaking fast-track follow-on offers by real estate investment trusts (REITs) and infrastructure investment trusts (InVITs) to make fundraising more efficient.
