FM Nirmala Sitharaman, in the Union Budget for 2025-26, said there will be big tax cuts and less strict rules for the IFSC at GIFT City. This plan will boost investment chances and strengthen India as a global money centre.
Key tax incentives and benefits
GIFT City, located between Ahmedabad and Gandhinagar in Gujarat, is set to benefit from extended tax concessions and regulatory ease. During her budget speech on 1st February, Sitharaman proposed specific incentives for ship-leasing units, insurance offices, and treasury centres of global firms operating in IFSC. To further encourage investment, the government has extended the cut-off date for businesses to claim these benefits by five years, until 31st March 2030.
Experts believe these measures will drive growth in GIFT City and attract more global investors. MD and Group CEO of GIFT City, Tapan Ray, commented, “The Union Budget 2025 reinforces the government’s commitment to making GIFT City a global financial hub. The proposed tax incentives and regulatory simplifications will attract global investors, fund managers, and businesses, strengthening India’s financial ecosystem.”
What is GIFT City?
GIFT City (Gujarat International Finance Tec-City) is designed as India’s premier international financial centre. It is divided into two zones: a Special Economic Zone (SEZ) that houses financial institutions and banks and a non-SEZ area consisting of commercial offices and residential spaces. Out of its total 880 acres, about 30% is currently operational, with another 30% reserved for residential projects.
IFSCs are designed to provide financial services to non-residents and select Indian residents in foreign currencies. Over the years, the government has introduced several tax incentives to support IFSC-based businesses and promote India as a preferred investment destination. The new budget will keep tax breaks going until 2030. It also adds breaks for life insurance plans from companies in the IFSC. These moves should boost the building of homes and offices in GIFT City. This will help make India a strong part of the world finance market.
