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GIFT City's Real Estate to Get a Boost with Budget 2025’s IFSC Incentives

Feb 02, 2025 01:26 PM IST

Budget 2025 has proposed several incentives and relaxations for the International Financial Services Centre at GIFT City

Finance Minister Nirmala Sitharaman, in her Union Budget 2025-26 speech on February 1, proposed several incentives and relaxations for the International Financial Services Centre at GIFT City, also known as Gujarat International Finance Tec-City. GIFT City, which is located on the banks of the Sabarmati River, between Ahmedabad and Gandhinagar in Gujarat.

Finance Minister Nirmala Sitharaman, in her Union Budget 2025-26 speech on February 1, proposed several incentives and relaxations for the International Financial Services Centre at GIFT City.(HT Files)
Finance Minister Nirmala Sitharaman, in her Union Budget 2025-26 speech on February 1, proposed several incentives and relaxations for the International Financial Services Centre at GIFT City.(HT Files)

"In order to attract and promote additional activities in the IFSC, I am inter alia proposing specific benefits to ship-leasing units, insurance offices and treasury centres of global companies which are set up in IFSC. Further, to claim benefits, the cut-off date for commencement in IFSC has also been extended by five years to 31.3.2030," Sitharaman said in the Budget 2025 speech on February 1.

Also Read: What Budget 2025 means for homebuyers: More money in hand, sweetener on self-occupied properties to boost real estate

According to experts, the exemptions and relaxations proposed by the finance minister during the budget speech are expected to boost investments in GIFT City.

Also Read: Homeowners can now claim tax relief on two properties. Budget 2025 eases the tax burden

"The Union Budget 2025 reinforces the government’s commitment to making GIFT City IFSC a global financial hub. The proposed tax incentives and regulatory simplifications will attract global investors, fund managers, and businesses, strengthening India’s financial ecosystem. With these measures, GIFT City is set to become a competitive and business-friendly destination on the global financial map. It will play a key role in driving India’s growth in the international financial services sector," said Tapan Ray, MD and Group CEO, GIFT City on Union Budget 2025-26.

What is GIFT City?

GIFT City is broadly divided into an SEZ with financial institutions and banks and a non-SEZ area with commercial office spaces and residential buildings. Of the total 880 acres, around 30% of the GIFT City is currently operational, and around 30% of the total area is reserved for residential projects, according to property consultants.

Also Read: Here’s why the real estate market in Gujarat’s GIFT City is high on the liquor consumption policy

Finance Minister Nirmala Sitharaman on February 1 announced a host of measures, including benefits for ship-leasing units, insurance offices and treasury centres of global companies in IFSC, as part of efforts to make India a preferred investment destination.

IFSC is a jurisdiction that provides financial services to non-residents and residents to the extent permissible under the current regulations in any currency except the Indian rupee. Over the past few years, several tax concessions have been provided to units located in IFSC to promote the development of world-class financial infrastructure in India.

To further incentivise operations from IFSC, Sitharaman, in the latest Budget proposed an extension of sunset dates for several tax concessions pertaining to IFSC till March 2030; and an exemption on life insurance policy from IFSC insurance offices.

Under the existing provisions, there are sunset dates such as March 2024, March 2025 or March 2026 for various tax incentives provided to IFSC.

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