How GIFT City’s Tax Benefits Are Attracting Investors and Homebuyers

GIFT City tax benefits are not just policy perks; they are strong government initiatives attracting investors and homebuyers towards India’s most promising fintech destination.

Imagine a city where strategic location meets unmatched opportunities, and every investment move rewards you back. GIFT City is fast becoming that destination for forward-thinking investors and discerning homeowners. With futuristic planning, government-backed incentives, and fintech infrastructure at its core, this smart city is redefining how wealth and value are built in India’s urban landscape.

From reduced costs on property transactions to exemptions that strengthen investment returns, GIFT City tax benefits are creating real opportunity. This blog explores how these advantages are reshaping real estate preferences and investment decisions.

Why GIFT City is Emerging as a Top Investment Destination

India’s financial landscape is evolving, and this city stands at the forefront of this transformation. What makes it stand out is not just its futuristic infrastructure, but also the strategic policy push that is reshaping investment patterns.

Backed by a progressive regulatory framework, GIFT City investment is now seen as a smart move for those looking to grow capital while enjoying urban convenience. Here is why it is emerging as a top investment destination:

• Ease of Doing Business: The International Financial Services Centre (IFSC) framework reduces red tape and offers streamlined setup process for financial and real estate ventures
• Future-ready Infrastructure: From smart mobility and integrated utility tunnels to energy-efficient systems, the city supports long-term growth without the usual urban friction
• Tailored Financial Ecosystem: Special provisions for fintech firms, AIFs, and global banks enable diverse GIFT City investment opportunities under one roof, fostering unified and future-ready financial environment
• Attractive GIFT City financial incentives: These include reduced compliance costs, exemptions on capital gains, and lower transaction taxes – all of which impact profitability
• Rising GIFT City Real Estate Potential: With rising interest from NRIs, corporates, and institutional investors, residential and commercial properties are seeing consistent value appreciation

Understanding GIFT City’s Special Tax Benefits

The city’s IFSC offers a strategic mix of infrastructure and financial reform. Exclusive GIFT City tax benefits include income tax exemptions, zero GST on select offshore transactions, and capital gains relief – making it attractive for global investors and businesses. With simplified regulatory environment and strong investment appeal, the city continues to gain momentum as a smart, tax-efficient destination for both enterprises and homebuyers.

A recent policy upgrade has further strengthened investor confidence – a 5-year extension of tax benefits for financial institutions operating in GIFT City. Earlier offered for shorter tenures, these exemptions will now remain valid until 31 March 2030, allowing businesses to plan for long-term growth. Additional reforms propose a simplified safe harbour regime for investment funds managed from the IFSC, reducing tax uncertainties for fund managers.

Mutual funds and ETFs can now relocate, with capital gains exemptions effective from April 2026. These GIFT City financial incentives make India-centric funds operating in foreign jurisdictions more likely to shift base. Now, the expanded tax exemption regime also includes participatory notes (p-notes) issued by non-banking financial institutions and Foreign Portfolio Investors (FPIs), enhancing the city’s appeal to international markets.

Also Read: Budget 2025 and GIFT City: Key Takeaways for the Financial Sector

Tax Benefits for Businesses and Investors

One of the biggest drivers behind being a high-potential destination is the robust suite of GIFT City tax benefits, that offer long-term financial efficiency for businesses and institutional investors. Backed by a progressive regulatory ecosystem, the city is unlocking newer avenues for growth – especially for those in finance, fintech, and allied sectors.

• Corporate Tax Exemptions: Entities set up in the IFSC can claim 100% tax exemption for any 10 consecutive years, out of a 15-year window. This is particularly advantageous for financial institutions, fintech startups, and international banks that operate with long-term growth strategies. The latest extension of this benefit until March 2030 ensures predictability for firms evaluating GIFT City as a base of operations.
• No GST on Offshore Transactions: Zero-rated GST on specified offshore services enables financial firms to scale operations without domestic tax liabilities – an attractive feature that enhances the city’s global competitiveness.
• Exemptions on Capital Gains Tax: Investors engaged in stock trading, asset management, or securities transactions benefit from capital gains tax relief within IFSC jurisdiction, making the GIFT City investment ecosystem more attractive compared to conventional Indian markets.
• Benefits for Foreign Investors: There is no long-term capital gains tax on derivatives and certain securities traded within IFSC. The government has also relaxed key conditions under Section 9A, which earlier restricted foreign fund managers. Now, firms set up before 2030 enjoy easier regulatory access, encouraging global investment houses to shift operations to India. Furthermore, relocation of offshore funds to GIFT City is now a tax-neutral transaction.

Tax Benefits for Homebuyers and Real Estate Investors

The city is not just a financial hub; it is also evolving into a thriving residential zone. It offers more than just a futuristic address, for homebuyers and real estate investors. Here are the key tax benefits available for homebuyers and real estate investors in GIFT City:

• Reduced Stamp Duty
  

  While the stamp duty exemption applies to broking firms, it enhances the financial ecosystem by attracting more institutions and professionals. This influx is expected to boost demand for housing, thereby increasing property values and long-term returns for GIFT City real estate investors and homebuyers. In contrast, both Ahmedabad and Gandhinagar impose a stamp duty rate of 4.9% on property transactions. This includes a basic rate of 3.5% and an additional surcharge of 1.4%.

• Property Tax Incentives
  

  With the 2025 Union Budget extending tax concessions for IFSC-related activities until 31 March 2030, GIFT City is expected to witness a sharp rise in institutional interest and professional migration. This anticipated influx of 100,000 professionals over five years is likely to increase residential absorption, encouraging developers to pass on GIFT City financial incentives to homebuyers through competitive pricing and early-stage tax reliefs.

GIFT City vs. Other Investment Destinations

India offers a range of investment zones – from traditional Special Economic Zones (SEZs) to global financial hubs like Mumbai’s BKC. However, GIFT City sets a new benchmark with its unified regulatory environment, superior infrastructure, and forward-looking tax framework. The table below outlines how the city compares to other key investment destinations in India:

Feature / Parameter	GIFT City (IFSC)	Traditional SEZs	Other Financial Hubs (Mumbai, Delhi)
Regulatory Framework	Unified under IFSCA, with centralised approvals	Multiple agencies; higher compliance load	Standard RBI / SEBI framework, with state-level regulations
Tax Incentives	100% income tax exemption for 10 out of 15 years; no LTCG on select securities	Tax holidays vary by industry; limited capital gains relief	Regular taxation; no special long-term tax breaks
GST on Offshore Transactions	Exempt for eligible services	Applicable in most SEZs	GST applicable on all financial transactions
Ease of Doing Business	Single-window clearance and simplified licencing	Moderate to high procedural delays	Varies by state and sector
Global Investor Access	Encouraged via relaxed capital controls and listing flexibility	Limited; depends on sector	Regulated; no extra allowances for foreign participation
Infrastructure	India’s first operational greenfield smart city, with integrated utilities & smart tech	Industrial focus; mixed infrastructure quality	Developed zones, but limited by urban congestion
Real Estate Growth Potential	High, with rising demand from corporates and NRIs	Location-dependent	Saturated in many premium areas
Core Strength	Financial services, fintech, global banking	Manufacturing, logistics	Domestic finance and IT hubs

Future Growth and Investment Potential

India’s first IFSC has already laid the groundwork for GIFT City to become a global financial powerhouse. What makes this even more compelling for investors and homebuyers, is the scale of infrastructure and policy planning that supports future-ready development. Many key developments continue to add momentum:

• International Collaborations: The city has partnered with global exchanges and financial institutions, opening doors for cross-border capital flows and innovation-driven industries. Notably, the Abu Dhabi Investment Authority (ADIA), the UAE’s largest sovereign wealth fund, has commenced operations here – establishing a $4-5 billion fund dedicated to investments in India through this hub.
• Dedicated Transport Infrastructure: The city is set to be strengthened with the ₹2300 crore Ahmedabad-Gandhinagar metro extension, directly connecting to the airport and GNLU. This enhanced connectivity is expected to boost commercial and residential demand, making GIFT City real estate more accessible and future-ready.Whether you are eyeing long-term capital growth or seeking a reliable asset in a future-centric city, GIFT City investment offers a compelling mix of regulatory stability, urban excellence, and investment-grade opportunity.

Conclusion

As India sharpens its position in the global fintech landscape, GIFT City emerges not just as a symbol of ambition but also as a working model of smart, tax-efficient urban planning. With its unmatched mix of policy-led advantages, strategic infrastructure, and economic foresight, GIFT City investment offers more than savings; it delivers certainty, scale, and sustainable returns.

Whether you are an institutional investor seeking fiscal optimisation or a homebuyer looking for future-ready value, GIFT City tax benefits, property ecosystem, and financial incentives make it a destination that transforms both opportunity and outcome.

FAQs

1. What is GIFT City, and why is it gaining popularity?

GIFT City is India’s first operational greenfield smart city, and it is gaining popularity for its strategic location, world-class infrastructure, hosting the country’s first IFSC, and investor-friendly tax regime.

2. What are the key GIFT City tax benefits?

Key GIFT City tax benefits are 100% tax exemption for companies for 10 continuous years out of 15, zero GST on eligible offshore services, and capital gains tax relief for select transactions.

3. Who can benefit from GIFT City’s tax exemptions?

Entities who can benefit from GIFT City’s tax exemptions include businesses, foreign portfolio investors, fintech firms, mutual funds, and those investing within the IFSC jurisdiction.

4. Is there any GST exemption for real estate transactions in GIFT City?

There is no specific GST exemption for real estate transactions in GIFT City.

5. Are there any constraints on foreign investors in GIFT City?

There are no constraints on foreign investors specific to GIFT City. In fact, the regulatory environment supports foreign participation through capital gains exemptions and relaxed fund relocation norms.

6. How does GIFT City compare to SEZs in terms of tax benefits?

GIFT City compares favourably to SEZs in terms of tax benefits, by offering unified regulatory framework and superior tax benefits such as long-term capital gains exemptions and 100% income tax holidays for 10 continuous years out of 15.

7. What are the real estate investment prospects in GIFT City?

The real estate investment prospects in GIFT City are highly promising, with demand expected to rise sharply due to projected migration of over 100,000 professionals, ongoing infrastructure upgrades, and sustained policy support.

8. Are there any additional GIFT City financial incentives for business?

Yes, additional GIFT City financial incentives for business include extended tax exemptions until 2030, tax-neutral relocation for funds, and regulatory relaxations under Section 9A.

9. How does investing in GIFT City real estate compare to that in other financial hubs like Mumbai or Delhi?

Investing in GIFT City real estate offers better long-term tax savings, lower compliance burdens, and futuristic infrastructure compared to other financial hubs like Mumbai and Delhi.

10. Is GIFT City a good option for NRIs and international investors?

Yes, GIFT City is a good option for NRIs and international investors, due to transparent governance, attractive fiscal policies, and increasing demand for premium real estate.