Taking forward its efforts to further promote the International Financial Services Centre (IFSC) in Gujarat, the government has proposed income tax incentives to promote various business activities such as ship leasing & financing, offshore fund management & offshore banking activities at GIFT City. The union budget has proposed to provide that income of a non-resident from offshore derivative instruments, or over the counter derivatives issued by an offshore banking unit, income from royalty and interest on account of lease of ship and income received from portfolio management services in IFSC shall be exempt from tax, subject to specified conditions.
Further, it has allowed world-class foreign universities and institutions to offer courses in Financial Management, FinTech, Science, Technology, Engineering and Mathematics, free from domestic regulations, except those by IFSCA to facilitate availability of high-end human resources for financial services and technology in GIFT City, Gujarat. “An International Arbitration Centre will be set up in the GIFT City for timely settlement of disputes under international jurisprudence,” finance minister Nirmala Sitharaman said in her budget speech. “Services for global capital for sustainable & climate finance in the country will be facilitated in the GIFT City,” she added. Manoj Purohit, Partner & Leader – Financial Services Tax, BDO India said, the move to allow world class Financial Institutions and Universities to set up base free from domestic regulations under IFSCA will give boost to human resources development and expansion in GIFT IFSC.
Tapan Ray, MD & Group CEO, GIFT City in a statement said, “ Today’s union budget announcements reiterate the commitment of Ministry of Finance towards energizing the regulatory ecosystem at GIFT IFSC which will have a huge multiplier effect for the country’s economic growth.”
“The setting up of world class universities without any domestic regulation will facilitate skilled manpower in the financial services space. International arbitration centre will strengthen the dispute resolution mechanism at GIFT IFSC & enhance ease of doing business at GIFT,” he said.
“The exemption of income tax would promote various business activities such as ship leasing & financing, offshore fund management & offshore banking activities,” he added.
