GIFT City / IFSC

GIFT City (Gujarat International Finance Tec-City) in Gandhinagar hosts India's only operational International Financial Services Centre (IFSC). Regulated by the IFSC Authority (IFSCA), it operates as a deemed-foreign-territory financial zone where transactions are in convertible currency (mostly USD).

What investors can access:

• IFSC-registered AIFs investing in global securities
• Bullion exchange (India International Bullion Exchange, IIBX)
• Direct access to US-listed stocks via IFSC banking units and NSE IFSC platform
• Insurance, reinsurance, ship leasing, aircraft leasing entities

Tax incentives:

• 10-year tax holiday for IFSC units (any 10 out of first 15 years)
• No STT, CTT or stamp duty on transactions on IFSC stock exchanges
• Foreign investors and NRIs face no capital gains tax on listed securities transacted through IFSC exchanges
• GST exemption on services rendered to non-residents

Example: An Indian resident uses the LRS route (USD 250,000 / year) to remit funds to a GIFT IFSC banking unit. From there she buys US Treasury bills via the IFSC-listed funds. The setup is reportable in her Indian ITR (Schedule FA) but enjoys streamlined onshore custody and SWIFT-equivalent settlement.

Caveat: Some retail-facing products are still rolling out. KYC remains stringent; PAN, Aadhaar, FATCA self-certification are mandatory.

Related: LRS, FATCA, FPI, NRI.

Disclaimer: Educational content from MintByte (ARN-314872, MFD). IFSC product structures and tax rules evolve frequently — verify with a qualified adviser. SEBI Investment Adviser registration is in process.