India's IFSC Gets Boost: Tax Incentives & Extended Deadlines

New Delhi, Feb 1 (PTI) Finance Minister Nirmala Sitharaman on Saturday announced a host of measures, including benefits for ship-leasing units, insurance offices and treasury centres of global companies in IFSC, as part of efforts to make India a preferred investment destination.

IFSC (International Financial Services Centre) is a jurisdiction that provides financial services to non-residents and residents to the extent permissible under the current regulations in any currency except Indian rupee. In order to promote the development of world-class financial infrastructure in India, several tax concessions have been provided to units located in IFSC over the past few years.

In order to further incentivise operations from IFSC, Sitharaman in the latest Budget proposed extension of sunset dates for several tax concessions pertaining to IFSC till March 2030; and exemption on life insurance policy from IFSC insurance offices.

Under the existing provisions, there are sunset dates such as March 2024, March 2025 or March 2026 for various tax incentives provided to IFSC.

The government also proposed rationalisation of definition of 'dividend' for treasury centres in IFSC and a simplified regime for fund managers.

Commenting on the Budget proposals, Tapan Ray, MD and Group CEO of GIFT City, said the Budget reinforces the government's commitment to making GIFT City IFSC a global financial hub.

"The proposed tax incentives and regulatory simplifications will attract global investors, fund managers, and businesses, strengthening India's financial ecosystem," he said.

With these measures, GIFT City is set to become a competitive and business-friendly destination on the global financial map.

It will play a key role in driving India's growth in the international financial services sector, Ray added.

Aditya Hans, Partner, Dhruva Advisors, said one of the key announcements is the extension of the deadline for businesses to commence operations in GIFT City until March 2030 to qualify for tax benefits.

This move is intended to provide long-term certainty for investors and encourage sustained growth within the IFSC, Hans added.