British multinational bank Standard Chartered will become the first foreign bank to launch operations at International Financial Services Centre (IFSC) located in Gujarat International Finance Tec-City (GIFT City). Standard Chartered has received in-principle regulatory approvals to set up its IFSC Banking Unit in GIFT IFSC, said GIFT City. An IFSC provides financial services including fund-raising services, wealth management, global tax management and wealth management, to customers outside the jurisdiction of the domestic economy.
“Government of India had envisaged GIFT IFSC as a hub to bring offshore financial transactions onshore, and with the presence of Standard Chartered, the IFSC ecosystem of India will become more formidable now. In addition, the announcements made in the recent Union Budget have provided the much-needed impetus to take GIFT on a fast track mode. This would definitely incentivise more international financial intuitions to set up their base in GIFT City. The recent budget has laid special emphasis on aircraft financing and leasing and announced various incentives,” Tapan Ray, MD & Group CEO, GIFT City said.
Gujarat International Finance Tec-City (GIFT City) is the Gujarat government project in partnership with IL&FS for developing the country’s first international financial hub. Finance Minister Nirmala Sitharaman in her maiden budget speech on Jul 5 proposed several tax incentives including an extension of deduction of 100 per cent of profits to 10 consecutive years to the business units in the GIFT City.
Currently, an IFSC unit is allowed deduction of 100 per cent of profits for the first five consecutive years and 50 per cent for the next five consecutive years from the year of commencement. Finance Minister Sitharaman proposed to hike this to a 100 per cent profit-linked deduction under Section 80 LA in any 10-year block within a period of 15 years from the date of commencement in order to give a boost to IFSC in GIFT. The budget also proposed exemption from dividend distribution tax from current and accumulated income to companies and mutual funds, exemptions on capital gain to Category-III AIF.