GIFT City funds want tax removed

The regulator of GIFT City, short for Gujarat International Finance Tec City, has relayed a key demand from fund companies operating there to the Union finance ministry that tax collected at source, or TCS, be exempted on investments made by Indians in the international financial services centre (IFSC).

- Srushti Vaidya

GIFT City, India’s first IFSC, is considered an offshore jurisdiction and whenever an Indian investor sends money to a fund registered there, the transfer attracts TCS like any other overseas transfer. TCS for investments is levied at a rate of 20% for amounts exceeding ₹10 lakh.

The International Financial Services Centre Authority, or IFSCA, as the GIFT City regulator is named, has not got any commitment from the finance ministry on the same, said an official with direct knowledge of the matter.

All demands from entities in GIFT City are first discussed with the regulator, which then takes it ahead to the respective authority. In the case, the authority is the finance ministry. In July, funds operating in GIFT City had approached IFSCA for removal of TCS on money remitted from the rest of India to GIFT City for investments, executives at multiple funds said.