Tax exemption notified for non-residents' investments in offerings by IFSC

New Delhi: The Centre on Friday notified the income tax exemption for investments by a non-resident in a financial product offered by capital market intermediary in International Financial Services Centre. The tax exemption, introduced in the budget last year, will be conditional to non-resident receiving income from such an investment in ban account maintained with the Offshore Banking Unit in IFSC. The move is aimed at making IFSC a lucrative investment destination.

"The relaxation will allow non-residents to claim tax exemption in India on income from financial products offered by GIFT city intermediaries and is expected to give a boost to financial products and solutions offered from GIFT City," Rajesh Gandhi, Partner, Deloitte India said. "Among various intermediaries, the foreign clients of the brokers trading on various financial products on the IFSC stock exchanges are likely to be major beneficiaries of this exemption," Sunil Gidwani, Partner- Financial Services, Nangia Andersen LLP said.

He added that the expansion of exemption was anticipated because these intermediaries did not have a level playing field with the portfolio management service platform providers.