Business Trust in India is a new concept drawn on the lines of a similar concept prevalent in the Singaporean economy.

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Historically, even in countries such as the United States and Singapore, it has taken significant time for REITs to pick up.^[1]

Real Estate Investment Trusts (REITs) aimed at attracting funds in a transparent manner into the real estate sector.^[2]

There are two types of Business Trusts which can be formed in India.^[3]

The guidelines, approved by its Sebi board, have kept the minimum requirement for asset sizes permitted to be listed in India at ₹5 billion (US$63 million). The minimum issue size of the initial public offer shouldn't be less than ₹2.50 billion (US$31 million).^[9]

As a benefit, any dividend would be tax exempt in the hands of the business trust and the dividend component of the income distributed by the business trust would also be exempt in the hands of unit holder.^[10] Any interest received by business trust from SPV is taxable in hands of Unit holder with Normal Tax rate slab (as per Income Tax Act, 1961) and 5% in case of Non resident or foreign Companies.