Offshore Bonds FAQs
What are the tax incentives offered under GIFT City?
As an investor in GIFT City, you can avail of the following tax benefits:
- Non-Resident Indians (NRIs) will receive interest income.
- Funds lent to International Financial Services Authority (IFSC) units is non-taxable.
- A lower tax rate of 4% is applicable on long term Bonds and rupee-dominated Bonds listed on the IFSC exchange.
- The transfer of specified securities listed on the IFSC exchange by an NRI or Category III Alternative Investment Funds (AIF) will not attract capital gains tax in India. Specified securities include the following:
- Global Depositary Receipt (GDR)
- Foreign currency denominated Bond
- Rupee-denominated Bond of an Indian company
- Mutual Fund units
- Business trust units
- AIF units
- Foreign currency denominated Equity Share of a company
- Transactions under IFSC exchanges are exempt from Goods and Service Taxes (GST).
- Stamp duty, Securities Transaction Tax (STT) and Commodities Transaction Tax (CTT) does not apply to transactions carried out in the IFSC exchanges.
Is there an income tax exemption for GIFT City?
Yes, there are several tax exemptions for businesses and investors. Units in IFSC are 100% exempt from income tax for 10 consecutive years out of 15 years.
What is the benefit of investing in GIFT City?
GIFT City provides an all-encompassing service hub for global finances and information technology enterprises. As an investor, investing in GIFT City grants you access to global investments. You can open Call Accounts and Foreign Currency Term Deposits, invests in global equities and Bonds for GIFT City, and avail of loan facilities and treasury solutions, among others. Additionally, investors can enjoy tax benefits such as capital gains exemption for certain sales, GST, STT, CTT and stamp duty.