A neutral event for real estate sector, says Motilal

Following are the impact analysis of the Budget proposals for the real estate sector, according to Motilal Oswal SecuritiesMeasure: Budget proposed that the rental income arising from real estate assets directly held by the REIT is also allowed to pass through and to be taxed in the hands of the unit holders of the REIT.Impact: Solves the concerns of higher tax leakage in the form of marginal tax and dividend distribution tax (DDT) which were applicable at SPV level (as per existing structure).Measure: The sponsor will be given the same treatment on offloading of units at the time of listing as would have been available to him if he had offloaded his shareholding of special purpose vehicle (SPV) at the stage of direct listing.Impact: This would rationalize the capital gains regime for the sponsors, subject to payment of Securities Transaction Tax (STT).