In a recent announcement, the Department for Promotion of Industry and Internal Trade (DPIIT) has changed the actual definition of real estate business to offer more clarity in the FDI policy for the real estate sector. As per the circular, FDI is not permitted in a firm that is engaged in real estate business, farmhouse construction, or deals in trading of transferable development rights. It also added that any earning of rent/income through lease of property, not amounting to transfer will not amount to real estate business.
In the circular, the department said that, Real Estate business means dealing in land and immovable property with a view to earning profit from them, and it does not mean development of townships, construction of residential/commercial premises, roads or bridges, educational institutions, recreational facilities, and regional level infrastructure and townships.
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The Department of Promotion of Industry and Internal Trade (DPIIT) has been of opinion to lead the development of infrastructure while favoring investments and FDI Policy & investments that led to speculations in real estate sector have been discourage by the government.
One of the officials said that, earning of rent or income on the lease of property, not amounting to transfer will also not amount to real estate business.
