GIFT IFSC Regulatory & Tax Advisory | Savlana Init

GIFT IFSC · Regulatory & Tax

GIFT Regulatory & Tax Advisory — IFSCA Compliant. Tax Optimised.

Entities at GIFT IFSC operate at the intersection of IFSCA regulations, FEMA, and Indian tax law — we provide integrated regulatory and tax advisory to structure, operate, and optimise your GIFT City presence.

Operating at GIFT International Financial Services Centre offers significant regulatory and tax advantages — a unified regulator (IFSCA), access to global financial markets, foreign currency operations, and income tax benefits under Section 80LA. However, realising these benefits requires careful navigation of the IFSCA regulatory framework, the FEMA provisions applicable to IFSC transactions, and the conditions precedent for income tax deductions.

The regulatory and tax landscape at GIFT IFSC is evolving rapidly. IFSCA has issued comprehensive frameworks for fund management, banking, insurance, and fintech. The income tax provisions — including Section 80LA, the exemption for non-resident investors in IFSC funds under Section 10(23FH), and the capital gains tax treatment — have been progressively enhanced by successive Finance Acts. Transfer pricing implications for transactions between GIFT IFSC entities and their Indian group entities add another layer of complexity.

Our GIFT IFSC Regulatory & Tax Advisory practice advises on the complete regulatory and tax spectrum: structuring new entities and fund vehicles for maximum IFSCA compliance and tax efficiency; advising on the conditions for Section 80LA deductions and how to document and claim them; transfer pricing documentation for intra-group transactions involving the IFSC entity; and FEMA advisory on the treatment of IFSC transactions for Indian parent companies and investors.

Our GIFT Regulatory & Tax Advisory Services

GIFT IFSC Structuring Advisory

Advisory on structuring the GIFT IFSC entity or fund vehicle for regulatory compliance and income tax optimisation — entity type selection, activity scoping, and licensing roadmap.

Section 80LA Advisory and Compliance

Detailed advisory on qualifying for the Section 80LA deduction — eligible activities, income computation, conditions, and annual return filing requirements.

Fund Structuring at GIFT IFSC

Advisory on structuring Alternative Investment Funds (AIFs), ETFs, and other fund vehicles at GIFT IFSC under the IFSCA Fund Management Regulations — investor eligibility and tax treatment.

Transfer Pricing for IFSC Entities

Transfer pricing documentation, benchmarking analysis, and Form 3CEB filing for intra-group transactions between the GIFT IFSC entity and its Indian or foreign group entities.

FEMA and IFSC Interface Advisory

Comprehensive advisory on the FEMA treatment of GIFT IFSC — how Indian companies can transact with their IFSC units, capital flows, and RBI reporting requirements.

Non-Resident Investor Tax Advisory

Advisory on the income tax treatment of non-resident investors in GIFT IFSC funds — Section 10(23FH) exemptions, withholding tax, and treaty benefits.

IFSCA Regulatory Compliance Calendar

Setting up and managing the annual regulatory compliance calendar for GIFT IFSC entities — periodic returns, disclosures, and IFSCA reporting deadlines.

Tax Health Check for GIFT IFSC Units

A structured review of the GIFT IFSC entity's tax positions, Section 80LA claim, transfer pricing exposure, and FEMA compliance — with a gap analysis and remediation plan.

Our Process

Business Model Review

We review the planned or existing activities at GIFT IFSC, the entity structure, investor base, and transaction flows to identify regulatory and tax implications.

Regulatory and Tax Mapping

Applicable IFSCA regulations, FEMA provisions, income tax sections (80LA, 10(23FH), etc.), and transfer pricing rules are mapped to the entity's specific situation.

Advisory Delivery

A comprehensive written advisory is delivered — covering the regulatory framework, tax optimisation opportunities, compliance obligations, and risk areas.

Documentation and Filings

All required documentation — Section 80LA compliance records, transfer pricing documentation, IFSCA periodic returns — is prepared and filed.

Ongoing Advisory

We remain engaged as IFSCA issues new regulations and Finance Act amendments modify the GIFT IFSC tax provisions — providing proactive updates and compliance support.

Why It Matters

✓GIFT IFSC entity structured for IFSCA compliance and Section 80LA optimisation

✓Section 80LA deduction conditions documented and claimed correctly in ITR

✓AIF and fund vehicle structuring at GIFT IFSC under IFSCA regulations

✓Transfer pricing documentation for IFSC intra-group transactions prepared

✓FEMA advisory on Indian parent company's transactions with IFSC unit

✓Non-resident investor tax position — Section 10(23FH) and treaty benefits advised

✓Annual IFSCA regulatory compliance calendar maintained

✓Tax health check identifying gaps in Section 80LA claim and FEMA compliance

Frequently Asked Questions

Key benefits include: (1) Section 80LA — 100% income tax deduction for 10 out of 15 years on eligible IFSC income; (2) Section 10(23FH) — exemption for non-resident investors on income from IFSC funds; (3) MAT at 9% (instead of 15%) for IFSC units; (4) no STT, CTT, or stamp duty on IFSC transactions; and (5) GST exemption for qualifying IFSC services.

Section 80LA provides a 100% deduction from taxable income for eligible financial services income earned by a unit established in a notified IFSC (GIFT IFSC). The deduction is claimed in the annual ITR-6 return and requires a compliance certificate from IFSCA, audited accounts, and prescribed disclosure. The deduction is available for any 10 consecutive years out of the first 15 years from commencement.

Yes. Transactions between a GIFT IFSC entity and its Indian or foreign associated enterprises are subject to transfer pricing regulations under Sections 92 to 92F of the Income Tax Act. Benchmarking analysis, Form 3CEB by a CA, and transfer pricing documentation are required annually for qualifying transactions.

Non-resident investors in Category III AIFs at GIFT IFSC can claim exemption under Section 10(23FH) on income distributed by the fund, subject to the fund complying with IFSCA regulations. Additionally, capital gains on transfer of securities by non-residents at GIFT IFSC may be exempt under specific conditions or reduceable under DTAA.

GIFT IFSC entities are subject to Minimum Alternate Tax (MAT) at 9% of book profit (plus surcharge and cess), compared to the standard 15% MAT rate for other companies. This lower MAT rate is an additional tax benefit for IFSC entities during the period before they can access the full Section 80LA deduction.

Under FEMA, GIFT IFSC is treated as a foreign jurisdiction. Therefore, transactions between an Indian company and its IFSC Banking Unit or other GIFT IFSC entity are treated as cross-border transactions and must comply with applicable FEMA provisions — including RBI reporting for capital flows and foreign currency transaction reporting.

Need regulatory and tax advisory for your GIFT IFSC entity?

We advise on IFSCA compliance, Section 80LA structuring, transfer pricing, and FEMA — integrated regulatory and tax support for your GIFT City presence.