Gujarat International Finance Tec-City (GIFT)-IFSC is being promoted as a tax-neutral enclave for the financial sector.
Nangia Andersen LLP Partner-Financial Services Sunil Gidwani said currently, the law provides for exemption from capital gains tax on various securities either trading on the stock exchanges in GIFT city or securities issued by entities set up in GIFT city.
"The new fund regime provides for funds to be set up as investment trusts, and hence, the law required the inclusion of units issued by such trusts for the purpose of exemption from capital gains.
"Similarly ETF listed and trading on the stock exchanges in GIFT city would now qualify for capital gains tax exemption. These changes would further expand the scope of incentives available for funds and stock market trading in IFSC," Gidwani added
AKM Global Tax Partner Amit Maheshwari said the notification is in line with the objective of making the International Financial Services Centre (IFSC) a hub for financial services in the world and incentivising non-resident investors on a recognised stock exchange.
"It is important to note that to take advantage of this exemption, the consideration for such a transaction should be paid or payable in foreign currency. The securities, which are added through the new notification, include (i) a unit of
"These relaxations are a welcome move by the government and will make it globally more competitive for the non-resident investors," Maheshwari added.