new delhi amid intense lobbying the government is holding firm on its proposal to levy dividend distribution tax on infrastructure investment trusts invits and real estate investment trusts reits the government is of the view that it is not detrimental to the interests of retail and foreign investors and is in line with the principle of an exemptionfree regimeseveral global investors and lobby groups such as the asia pacific real estate association aprea have argued the move will reduce returns and make it unattractive for indian companies including the likes of nhai gail and powergrid and result in a flight of capital outside the country reits and invits are seen as tools to raise capital which can be used for new projects to reduce the asset load apart from providing an exit option to some investorson its part aprea has argued the government had gone back on its promise to keep dividends out of the tax equation and only levy tax on income as a result it has estimated that the tax outgo for a domestic investor with debt from reits into a special purpose vehicle will see a steep rise overseas investors will also see a significant increasedays before the finance bill is put to vote government sources told toi that the move does not increase the burden on retail investors whose dividend income will be taxed in line with their income bracket for overseas investors there is a facility to get a tax credit available to them for taxes paid in indiathe tax rate has come down significantly and we are moving to an exemptionfree regime and this is a move in that direction said an official tax officers also said highnet worth individuals hnis and some companies planning invits or reits have been crying foul but they have to be on the same page as other investors how is an hni in these instruments different from someone buying tcs wipro or an infrastructure companys shares an officer said adding that other structures could be looked at for invits or reits