Chartered Accountant · ICAI M.No. 153926 · FRN 136869W
What GIFT City is
GIFT City hosts India’s International Financial Services Centre (IFSC) — treated, for many purposes, as offshore. It lets NRIs access global and Indian investments (funds, bonds, equities, insurance) through an Indian jurisdiction built to be tax- and currency-efficient, often transacting in foreign currency.
The tax concessions
The incentives are meaningful: interest on certain IFSC-listed bonds and many gains for non-residents from IFSC securities and funds can be exempt or taxed at concessional rates, frequently without TDS. The aim is to make GIFT City competitive with offshore centres like Singapore or Dubai. The concessions are detailed and evolving — confirm the current treatment for the specific product before investing.
A worked example
Example: an NRI investing through a GIFT City fund may receive distributions that are exempt in India and not subject to TDS, where the same investment onshore would attract tax and deduction. The practical appeal is fewer Indian tax frictions and easier repatriation in foreign currency. Because product structures differ, the tax outcome should be checked product by product. Our NRI tax service can review a specific GIFT City investment.