The recently notified scheme rules out joint development of industrial parks by a developer and land owner, which is common mechanism followed by the real estate industry. The benefits under the scheme are available only to the notified undertaking and not to a subsequent owner or transferee. This severely restricts the exit options for the developer. Software, consulting and data processing have been kept out of the list of permitted industrial units under the scheme.

The real estate industry has sought introduction of special residential zones (on the lines of special economic zones), entailing similar approvals, the board structure, and monitoring and execution, and also similar concessions in terms of direct and indirect taxes.

REITs should be treated on par with mutual funds, which enjoy income-tax exemption and the taxation is only at the level of investor. Under the principles of taxation of trusts, REITs may be taxed at 30 per cent, which would defeat the very purpose of allowing small investors to invest directly in real estate.