Tax Benefits in GIFT City: Complete Guide for Businesses (2025)
🎉 FinGuru Diwali Offer – Company Registration + Business Setup Guide + 3 Months Bookkeeping Free + GST Registration + Consultation Call 🎉 🎉 FinGuru Diwali Offer – Company Registration + Business Setup Guide + 3 Months Bookkeeping Free + GST Registration + Consultation Call 🎉

Diwali Offers

Diwali Offers

Company Registration

Get 3 month Bookkeeping

Free

A Step-by-Step Guide to Understanding Tax Benefits for Businesses in GIFT City

Table of Contents

India is building a new global business hub—GIFT City

Gujarat International Finance Tec-City, located in Gandhinagar, is a smart zone for finance and tech companies. Whether you’re starting a business or expanding one, GIFT City brings exciting tax savings.

As India’s first International Financial Services Centre (IFSC), it offers special tax breaks, lower corporate taxes, and simple rules to help businesses grow faster.

This guide covers:

  • Main tax advantages in GIFT City
  • Benefits by sector
  • Challenges to plan for
  • Key points to think about before starting up here

Let’s explore how GIFT City can help your business save money and grow.

Why Tax Benefits in GIFT City Matter

GIFT City isn’t just about location—it’s a smarter financial choice. Here’s what makes it stand out:

  • 10-Year Tax Holiday – Companies here don’t pay income tax for any 10 years out of the first 15.
  • Lower Corporate Tax Rates – Some of the best rates in India.
  • GST Benefits – Many services are GST-free.
  • Great for Global Investors – Tax-free dividends and interest income for non-residents.
  • No Transaction Charges – No STT, CTT, or stamp duty on financial trades.

Step-by-Step Look at GIFT City Tax Benefits

Step 1: The 10-Year Tax Holiday

Businesses can enjoy 0% income tax for 10 years within their first 15 years. You can choose which 10 years to apply this to.

  • Best for: Banks, fintech, leasing, and export-oriented companies
  • Tip: Pick years when your profits will be highest.

Step 2: Lower Corporate Tax Rates

GIFT City’s corporate tax rates are lower than the rest of India:

Location Corporate Tax Rate MAT/AMT Rate
India (General) 22% + surcharge 15%
GIFT City (IFSC) 0% (during holiday), 9% 9%
  • Bonus: Some businesses using the new tax system pay no MAT.
  • Keyword: Corporate Tax GIFT City

Step 3: GST Benefits

GST is simpler in GIFT City:

  • No GST on services to/from IFSC units.
  • No GST on many imports.
  • Zero-rated for some exports.

Perfect for: IT, BPO, and export services

Keyword: GST Benefits

Benefits of Setting Up a Business in GIFT City: Tax, Regulations & More

Step 4: Capital Gains & Investment Tax Relief

If you invest or trade in GIFT City:

  • No capital gains tax on certain securities.
  • No STT, CTT, or stamp duty.
  • Dividends taxed at 10% for foreign investors.
  • Interest earned by non-residents is tax-free.

Great for: mutual funds, asset firms, and international investors

Example: Mutual funds can move to GIFT City by 2026 without capital gains tax.

Step 5: Sector-Specific Incentives

GIFT City tailors benefits to different industries:

Sector Key Incentive
Banking & Finance No income tax, global service freedom
Insurance/Reinsurance Easy cross-border deals, tax-free earnings
Aircraft Leasing No tax on leasing or interest
FinTech & IT No GST + capital subsidies under state policy

Challenges to Plan For

While the tax perks are big, here are a few points to keep in mind:

Tax Benefits for Businesses in GIFT-City

  • Dual Approvals – You may need clearance from both SEZ and IFSCA.
  • Infrastructure Still Growing – Schools, housing, and transport are improving.
  • Attracting Talent – Competing with Mumbai and Bangalore for skilled professionals.

Things to Consider Before Setting Up

  • Is your business focused on global or financial markets?
  • Will you benefit from the 10-year tax holiday?
  • Do you understand the IFSC/SEZ rules?
  • Are you ready for cross-border operations?

Conclusion

GIFT City is India’s most tax-efficient business zone. From low corporate tax to GST-free services and income tax holidays, it’s designed to boost business growth.

Yes, there are some challenges—but with smart planning, the rewards are big.

Ready to take advantage of GIFT City’s tax benefits? book a free Consultation for help you get started, stay compliant, and grow with confidence.

📞Contact us: +91-9999127022 🌐Visit: www.finguruindia.com

Types of Businesses Allowed in GIFT City

Join Our Newsletter

Recommended content for you

Recent Post
Convert a Private Limited Company into an OPC

Starting a business is exciting, but choosing the right structure is just as important. In

Foreign Subsidiary

Expanding into new countries has always been a big step for companies that aim high.

Private Limited Company

Starting a business in India is always exciting, but the very first step is deciding

Shareholders

Shareholders exit is one of the most sensitive but also one of the most important

MCA 21 Services

Starting and running a business in India involves many legal and regulatory steps. These steps

TDS

When you look at your salary slip or a bank statement, you’ll often see “TDS”

Start a Business in India

Starting a business in India is full of opportunities to grow, innovate, and create impact.

Import Export Taxes India

India has firmly established itself as a major player in international trade. In the fiscal