Union Budget 2019: Big tax sops for Gift City to put bourse on growth path

Kolkata: Modi 2.0 government’s maiden budget tabled by the union finance minister Nirmala Sitharaman on Friday has re-emphasised the importance of GIFT IFSC as an emerging Global financial services hub. The policy pronouncement regarding GIFT IFSC is expected to give a tremendous boost to investor confidence both in India and abroad. Key measures related to aircraft leasing business, reinsurance business, tax benefits, are likely to enable significant offshore finance activities to take place from India and create jobs in the financial services industry. It also promises to bring back billions of dollars of business, which India has been losing to other competing global financial hubs.

Several direct tax incentives including 100 per cent profit-linked deduction under Section 80-LA in any ten-year block within a fifteen-year period has been announced for the International Financial Services Centre (IFSC) in GIFT City. Union finance minister has also proposed an exemption from dividend distribution tax from current and accumulated income to companies and mutual funds, exemptions on capital gain to Category-III Alternative Investment Funds (AIF) and interest payment on loan is taken from non-residents”, have also been announced for IFSC.

Akhil Mittal, senior fund manager, Tata Mutual Fund, said, “The Centre has proposed tax benefits for Mutual funds in IFSC in GIFT City and also on income distributed by mutual funds derived from transactions on stock exchanges set up in such IFSC in Gift city. This looks good visionary step but might not translate to immediate actionable.”

The setting up of Unified regulator will further put GIFT IFSC in a fast track mode. We thank government for their support in creating a Vibrant Global Financial Hub,” said Tapan Ray, MD & Group CEO, GIFT City.