The Gujarat International Finance Tec-City (GIFT City) stands today as India’s bold and visionary step towards creating a world-class financial hub, comparable to Singapore, Dubai, or London. Strategically located in Gandhinagar, Gujarat, along the banks of the Sabarmati River, GIFT City is home to the International Financial Services Centre (IFSC) – a designated special economic zone equipped with cutting-edge infrastructure, regulatory autonomy, and unparalleled fiscal advantages.

The blueprint for GIFT City was laid out during the Union Budget 2015-16, wherein the Hon. Finance Minister envisaged an international finance centre that would attract global investors, many of whom were traditionally operating from offshore jurisdictions. The vision materialized with the formal establishment of the International Financial Services Centres Authority (IFSCA) on April 27, 2020, as the unified regulator for IFSC entities.

GIFT City: A Foreign Jurisdiction Within India

Legally speaking, any entity operating under the IFSC regulations is treated as a person resident outside India under FEMA. Transactions are mandated to be in freely convertible foreign currency, rendering such entities comparable to offshore financial centres – albeit situated within Indian territory.

While exemptions exist under FEMA, all other Indian legislations such as the Companies Act, Income Tax Act, and LLP Act continue to apply, unless specifically relaxed.

Why Choose GIFT City?

GIFT City is increasingly being recognized as India’s only true tax heaven within domestic borders, offering more attractive benefits than a standard SEZ environment. Unlike typical SEZs, GIFT City combines tax-neutral operations in foreign currency with longterm income tax exemptions, zero GST on offshore services, stamp duty waivers, and full exemption on STT/CTT/DDT.

Its primary purpose is to channel foreign capital through regulated, onshore financial infrastructure—a model explicitly designed to draw funds from foreign companies and sovereign wealth funds into India through a compliant yet tax efficient route.

Doing Business in GIFT City Comes with Exclusive Advantages:

• Single-window clearance
• Regulatory autonomy via IFSCA 
• Access to global financial markets 
• Pro-business ecosystem tailored for fintech, banking, insurance, asset management, and aircraft leasing 

Most importantly, GIFT City offers unprecedented tax benefits in India.

I. GIFT City- Benefits Under the Companies Act, 2013

Entities operating within the IFSC jurisdiction enjoy numerous regulatory relaxations, such as:

• CSR Exemption: Not applicable for the first 5 years (MCA Notification G.S.R. 338(E)) 
• Relaxed Resident Director Norms: Not mandatory in the first year 
• Internal Audit, Audit Committee & Nomination Committee: Not Applicable   
• EGM Flexibility: Meetings can be held abroad if approved by all shareholders 
• Board Meetings: Only two per year with a 90-day gap (vs. 4 annually) 
• Managerial Remuneration: Not subject to traditional statutory limits 
• CARO, Internal Financial Controls, Cash Flow Statements: Exempt for private companies 
• Faster Incorporation: Seamless registration and approvals 

II. GIFT City Tax Benefits Under Income Tax Act, 1961

Income Tax Exemption in India – Section 80LA

• 100% Income Tax Exemption for 10 consecutive years out of 15 years 
• Applicable to income from “eligible business” conducted by IFSC units 

Reduced MAT/AMT 

• MAT reduced to 9% for companies in IFSC (vs. 15% standard rate) 
• AMT not applicable to non-corporate IFSC entities 

Capital Gain Exemption in India

• Section 10(4E): No capital gains tax for non-residents on: 
  • Offshore derivative instruments
  • Over-the-counter derivatives 
  • Non-deliverable forward contracts 

Other Income Tax Exemptions

• Section 10(4D): No tax on income (interest, dividend, securities) for specified IFSC funds 
• Section 10(4F): No tax on aircraft/ship leasing income for non-residents 
• Section 10(23FB): Exemption for income of AIFs (Category I & II) in IFSC with non-resident investors 
• Section 115AD: Favourable tax treatment for FIIs/FPIs 
• Stamp Duty Waiver: Full exemption on key agreements and instruments executed in IFSC 

III. GIFT City Indirect Tax Incentives (GST & Customs)

• Zero-rated Exports: Services exported from GIFT City are GST-exempt 
• No IGST on Imports: Exempted under SEZ provisions 
• No GST on Intra-IFSC Transactions 
• Customs Duty Exemption: No Basic Customs Duty or Export Duty on authorized operations 

IV. Capital & Operating Subsidies

To incentivize infrastructure creation and job generation:

• Capital Subsidies: Up to 25% of capital expenditure (capped at ₹200 crores) 
• Operating Subsidies: Rental reimbursements, power tariff rebates, EPF support 
• IT/Cloud/Data Centre Support: One-time support and OPEX assistance 
• R&D Promotion: 60% reimbursement on capital machinery 

Recent Developments

• The Abu Dhabi Investment Authority (ADIA)—UAE’s largest sovereign wealth fund—officially commenced operations in GIFT City in October 2024 with a dedicated US $4–5 billion India fund, underscoring its role as a taxneutral financial gateway.   
• Dohaheadquartered QNB Bank became the first MEA regional bank to open a branch in GIFT City in May 2025.  
• Bandhan AMC also launched Indiafocused funds from its IFSC base.
• On the technology front, Cognizant inaugurated a 60,000 sq ft techfin centre in GIFT City in May 2025, reinforcing the city’s evolution into a digital finance and services hub attracting both global capital and tech operations. 
• TCS (Tata Consultancy Services) already operational in GIFT City, specialises in AI solutions, cybersecurity, and cloud computing for BFSI clients. The firm is expected to expand its GIFT City workforce to over 5,000 employees by end2025. 
• Infosys inaugurated a development centre with capacity for over 1,000 employees, focused on digital and fintech services. 
• Inflection Point Ventures (IPV) launched a $110 million Category I Angel Fund, “IPV International,” from GIFT IFSC to invest in early-stage startups across India and global markets. 
• 255+ AIFs (Alternative Investment Funds) are now registered in GIFT City, per the International Financial Services Centres Authority (IFSCA). 
• Major VCs that have set up in GIFT City include: Blume Ventures, 3one4 Capital, Stellaris Venture Partners, A91 Partners, and Z47. 

GIFT CITY – Business Structure Overview

When considering doing business in GIFT City, entities have two distinct operational pathways:

1. Multi Services SEZ (Special Economic Zone) 
2. DTA (Domestic Tariff Area)

Each route offers its own regulatory framework and business scope. The Multi Services SEZ is ideal for global financial and professional services, while the DTA focuses on services connected to operations within India.

Business Activities in GIFT City

Indian companies can either open a branch or set up a new IFSC company/LLP. Office space within GIFT City and a designated compliance officer are mandatory.

Conclusion: GIFT City – The Future of Global Financial Integration

With a confluence of regulatory relaxations, fiscal incentives, and state-of-the-art infrastructure, doing business in GIFT City is no longer a theoretical possibility—it is an increasingly attractive reality.

The GIFT City tax benefits regime not only reduces cost of compliance but also renders capital gain exemption in India, income tax exemption in India, and GST relief—all of which align India competitively with leading offshore jurisdictions.

As India positions itself as a global financial powerhouse, GIFT City stands at the epicentre of this transformation—a true “gift” for international business.