Tax benefits at the IFSC level

5 min · For educational purposes only

GIFT City offers a structured tax holiday at the entity and unit level. These benefits compound into materially better net-of-cost returns for end investors.

Entity-level benefits

100% tax holiday on business income for 10 consecutive years out of 15 for IFSC units
No GST on services provided to non-residents
Reduced MAT/AMT at 9% for non-IFRS reporting entities
No STT, CTT or stamp duty on transactions on IFSC exchanges

What this means for investors

Lower friction inside the product translates into lower expense ratios, tighter spreads and more competitive structured product pricing. The benefit is real but indirect — you see it in the all-in cost, not on a line item.

Investor-level taxation still depends on residency and the specific product. A resident Indian investing through an IFSC AIF Cat-III still pays Indian capital gains tax on their unit-level gains; the benefit accrues to the fund's operating economics, not to your personal tax bill.

Key takeaways

Entity-level tax holiday lowers product costs structurally.
Investor-level taxation is unchanged — residency rules still apply.
Expect tighter pricing on IFSC products versus equivalent Singapore/Mauritius-based structures over time.