Inside This Article
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
Read More: 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:
⚠ 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
Read Article: Types of Businesses Allowed in GIFT City
