Union Budget: Gift City units get extended tax holiday

Kolkata: India's International Financial Services Centre at GIFT City, which is being built as a global financial hub and a gateway for overseas capital flows, has received a major fiscal boost in terms of tax holidays.

The union budget said that the entities set up in the Gift City would get a tax holiday for 20 years instead of 10 years. After the holiday period, these units would be taxed at a lower 15% rate, the finance bill showed.

Overseas companies setting up units elsewhere in the country are taxed at a minimum 35% rate of their income.


The Gift City is located at Gujarat's Gandhinagar.

"The Budget provides strong long-term tax certainty for entities operating from India’s maiden International Financial Services Centre at GIFT City, significantly enhancing the country’s offshore financial competitiveness,' said Sanjay Kaul, managing director and Group CEO of GIFT City.

"This strengthens GIFT City’s position as a globally competitive financial hub," he said.

The government also plans to rationalise deemed dividend provisions for treasury centres.

"This is another positive step, as it removes structural tax friction for multinational groups and facilitates efficient treasury and funding operations through GIFT City," Kaul said.