1. What is GIFT City? Gujarat International Finance Tec-City (GIFT City) is India’s first smart city focused on establishing a global financial and IT services hub. Located in Gandhinagar, Gujarat, it houses the International Financial Services Centre (IFSC).
2. What is an IFSC? An IFSC is a designated area where financial institutions can deliver international financial services. It functions similarly to an offshore financial hub within India, providing services such as banking, insurance, and capital market activities.
3. What is the purpose of GIFT City? GIFT City aims to attract global businesses, offer world-class infrastructure, and position India as a significant player in the global financial ecosystem. The focus is on fostering innovation, investments, and employment opportunities.
1. What steps are being taken to promote GIFT City? The Union Budget has introduced various measures including tax incentives, regulatory reforms, and the extension of the relocation regime to Exchange-Traded Funds (ETFs) alongside capital gains exemptions to enhance investments and offshore funding.
2. How does the relocation regime for ETFs work? ETFs that track major indices like the Sensex or Nifty are allowed to relocate from offshore locations such as Mauritius or Singapore to GIFT City. This relocation is classified as a tax-neutral transaction, incentivizing fund managers to shift their operations.
3. What are the benefits for non-residents?
4. How will ship leasing businesses benefit? IFSC-based ship leasing units will enjoy capital gains tax exemptions on equity transfers and dividend exemptions, promoting growth in this sector.
5. What is the significance of the March 2030 deadline extension? Businesses now have until March 2030 to commence operations in GIFT City to qualify for tax benefits, providing long-term stability and certainty for investors.
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