Prepare Early, Stay Accurate, and File ITR Smoothly for FY 2025–26
Book Tax Experts Today
GIFT City, officially known as Gujarat International Finance Tec-City, is India’s first International Financial Services Centre (IFSC). It was created to position India as a global financial hub by offering tax incentives, foreign currency flexibility, and easier access to international financial markets.
However, while GIFT City offers several tax and investment advantages, investors must also understand the compliance side, especially ITR disclosures, foreign asset reporting, and TCS rules.
GIFT City is a special financial zone located in Gujarat that operates under the International Financial Services Centres Authority (IFSCA).
The objective is to bring offshore financial activities back to India by offering:
It is often compared with financial hubs like:
Eligible IFSC businesses can claim:
This mainly benefits:
Certain IFSC transactions may receive:
Tax treatment depends on:
Several services supplied to IFSC units are treated as zero-rated supplies, reducing GST burden for businesses operating in GIFT City.
One of the most important things investors often miss is income tax reporting.
According to recent tax guidance, investments made through GIFT City may need to be disclosed as foreign assets in the Income Tax Return (ITR), especially under Schedule FA for resident and ordinarily resident taxpayers.
Failure to disclose foreign assets properly may result in:
This becomes particularly important for investors using GIFT City for:
Resident Indians investing through GIFT City may also face Tax Collected at Source (TCS) on remittances under the Liberalised Remittance Scheme (LRS).
GIFT City is becoming increasingly popular among NRIs because it offers:
NRIs can invest in:
Yes. Resident Indians can invest through IFSC platforms under RBI’s Liberalised Remittance Scheme (LRS).
However, residents must still comply with:
No. GIFT City provides tax incentives and exemptions for certain businesses and transactions, but not all income becomes tax-free.
In many cases, yes. Resident and ordinarily resident taxpayers may need to disclose certain GIFT City investments under Schedule FA in the ITR.
TCS may apply on remittances above prescribed LRS limits for investment purposes. The amount can usually be claimed as tax credit while filing ITR.
Yes. Salaried individuals can access eligible IFSC investment products subject to RBI and FEMA regulations.
No. Residents, businesses, startups, institutional investors, and NRIs can all participate in GIFT City opportunities.
