Tax Benefits of Incorporating a Startup in the GIFT City SEZ

Tax Benefits of Incorporating a Startup in the GIFT City SEZ

🏢 Tax Benefits of Incorporating a Startup in the GIFT City SEZ

GIFT City (Gujarat International Finance Tec-City) is India’s first operational Smart City and International Financial Services Centre (IFSC). For startups and financial institutions looking for a globally competitive platform, GIFT City offers significant tax incentives, regulatory ease, and a futuristic infrastructure.

🌟 What is GIFT City SEZ?

GIFT City hosts a Special Economic Zone (SEZ) and an IFSC, making it a hotbed for startups, fintechs, and global investment firms. Entities incorporated here enjoy benefits under SEZ Act, 2005 and IFSC regulatory framework.

🧾 Key Tax Benefits for Startups

🏦 1. 100% Income Tax Exemption

✅ Startups registered as SEZ units enjoy 100% income tax exemption for 10 consecutive years out of the first 15 years under Section 10AA of the Income Tax Act.

📉 2. Minimum Alternate Tax (MAT) / Alternate Minimum Tax (AMT) Relief

✅ For companies in GIFT City SEZ, MAT/AMT is applicable at only 9%, compared to the normal 15%.

🌍 3. No Capital Gains Tax for IFSC Units

✅ Transfer of specified securities (e.g., bonds, derivatives) by an IFSC unit is exempt from capital gains tax.

🛃 4. GST Exemptions

✅ Supplies to GIFT City SEZ units are treated as zero-rated, meaning no GST is levied on the supplies from outside India or from DTA (Domestic Tariff Area).

📦 5. Customs and Import Duty Benefits

✅ Exemption from customs duty, GST, and other import duties on goods and services imported into the SEZ.

💵 6. Exemption from Dividend Distribution Tax (DDT)

✅ Companies in GIFT City do not have to pay DDT on the profits distributed as dividends.

🧮 7. Interest and Royalty Income Benefits

✅ Interest and royalty income earned by non-residents from GIFT City units is exempt from tax, making it easier to attract foreign investors.

⚖️ Regulatory & Operational Advantages

🗂️ Simplified Regulatory Approvals

GIFT City offers single-window clearance, fast approvals, and RBI/FEMA relaxations for cross-border transactions.

🔒 100% Foreign Ownership Allowed

Startups in GIFT City IFSC can have 100% foreign ownership, with no restrictions on repatriation of profits.

🧠 Who Should Consider Incorporating in GIFT City?

  • Fintech & Financial Startups

  • Asset & Wealth Management Firms

  • Insurance and Reinsurance Startups

  • IT & ITeS Companies targeting global markets

  • Startups looking for international fundraising or cross-border operations

✅ Conclusion

📍Incorporating a startup in GIFT City SEZ is not just about a prestigious location—it’s a strategic decision. With a 10-year tax holiday, zero GST, low MAT, customs duty waivers, and seamless global access, GIFT City is India’s gateway for ambitious startups with a global vision.

🚀 Whether you're a fintech innovator or a tech startup aiming to scale cross-border, GIFT City offers the perfect launchpad with powerful tax and regulatory advantages.

Created & Posted By Nishu Sharma

 Sales and Marketing Executive at TAXAJ      

TAXAJ is a consortium of CA, CS, Advocates & Professionals from specific fields to provide you a One Stop Solution for all your Business, Financial, Taxation & Legal Matters under One Roof. Some of them are: Launch Your Start-Up Company/Business, Trademark & Brand Registration, Digital Marketing, E-Stamp Paper Online, Closure of Business, Legal Services, Payroll Services, etc. For any further queries related to this or anything else visit TAXAJ

Watch all the Informational Videos here: YouTube Channel

TAXAJ Corporate Services LLP
Address: 1/3, UG Floor, Sulahkul Vihar, Old Palam Road, Dwarka, Delhi-110078

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