GIFT Regulatory & Tax Advisory
The tax case for GIFT is specific and conditional. It has to be mapped to the exact activity you are authorised for, not assumed from the brochure.
The tax case for a GIFT IFSC unit rests on a defined set of provisions: a 100% deduction of specified business income for any ten consecutive years out of fifteen under Section 80LA, relief from GST on services provided to offshore recipients and, in defined cases, to other IFSC units, and exemptions from securities and commodities transaction tax on transactions on IFSC exchanges. Because the benefits are activity-specific and conditional, the tax position has to be mapped to the exact IFSCA authorisation being sought.
What our GIFT tax advisory covers
The benefit, the conditions and the exposures that come with it.
- Mapping the Section 80LA deduction to the unit's authorised activities
- Choosing the ten-year window within the fifteen-year period
- GST analysis for offshore, intra-IFSC and domestic tariff area supplies
- Withholding tax and treaty analysis on inbound and outbound payments
- Transfer pricing for transactions with group entities in India and abroad
- Minimum alternate tax and regime selection for the entity
Where the tax analysis actually sits
Four areas, each with its own conditions.
Section 80LA
A full deduction of specified income for ten consecutive years chosen out of fifteen, available to units with the required IFSCA permission.
GST
Services to offshore recipients and defined intra-IFSC supplies fall outside the domestic GST net; supplies into India do not.
Withholding and treaties
Payments to and from the unit analysed for withholding, treaty relief and the documentation each requires.
Transfer pricing
Transactions with associated enterprises priced and documented, which matters more where a tax holiday is being claimed.
Our process
How we build the tax position.
Activity and eligibility
Confirming which income streams qualify for the deduction and which fall outside it.
Structuring
Entity form, regime election and the timing of the deduction window.
Documentation
Contracts, invoicing and transfer pricing documentation aligned to the position taken.
Annual compliance
Return filing, audit reports and the certifications the deduction requires each year.
Why the GIFT tax position needs care
What sets our approach apart.
The deduction is not blanket
Section 80LA covers specified income of a unit with the required permission; income outside that description is taxed normally, so revenue streams must be segregated.
Timing the window matters
Choosing which ten of the fifteen years to claim should follow the projected profit curve, because early loss-making years waste the benefit.
Transfer pricing scrutiny follows tax holidays
Where a group has both an IFSC unit and Indian entities, related-party pricing attracts closer attention precisely because the profit is exempt in one location.
GIFT Regulatory & Tax Advisory questions answered
What people ask before engaging us.
Modelling the GIFT tax benefit?
We will tell you which of your revenue streams actually qualify before you build the numbers around them.
