What’s in the blog?
This blog is an easy explanation of GIFT city. It breaks down everything NRIs need to know about this tax-friendly international financial hub of India.
You’ll discover how it eliminates capital gains tax on certain investments, removes TDS hassles on dividends, and even offers tax-free interest income for non-residents. We’ve also covered the bonus benefits like zero GST, STT, or CTT.
Table of Contents
“Anna, I want to invest here yaar, but it feels just too complicated. Kuch to raasta nikalo na” I’ve heard this from my NRI clients more times than I can count.
Non-Resident Indians have always wanted to invest in India. And, it’s not just emotionally because it’s their homeland, but because they can see growth potential here. But, the other side of the story – endless, complicated paperwork, currency exchange hiccups – kept majority of NRIs away.
That, however, was the story of the past.
Now, if you are an NRI who wants to participate in India’s growth story with your investments, MoneyAnna is here to help, not with a loophole but a completely legal, well-structured solution backed by the Government of India.
Welcome to GIFT City, India’s own international financial powerhouse that let’s you invest in India from anywhere in the world, and that too in USD.
So, What Exactly Is GIFT City?
GIFT, short for Gujarat International Finance Tec-City, is a Special Economic Zone (SEZ) built with one clear goal: To offer NRIs, global investors, and financial institutions a space that operates outside the usual Indian regulatory clutter.
It has its own unified regulator—IFSCA (International Financial Services Centres Authority)—which means one streamlined rulebook, not a dozen overlapping ones.
So when you route your investments through IFSC-registered platforms or entities within GIFT City, your taxation, compliance, and paperwork look entirely different from what you’d face in regular India. And the difference is substantially more favourable.
If you ask me how I see GIFT City?
"It’s a fast highway for global investors who believe in India’s growth and that too with the red carpet rolled out by the Government of India itself."
Why GIFT City Is a Game-Changer for NRIs and Global Investors
For years, investing in India as an NRI felt like preparing for a marathon with no clear roadmap. Too much paperwork. Too many tax hurdles. And just when you thought you had everything in place, currency conversion or TDS would knock you off balance.
That’s exactly why GIFT City isn’t just another policy experiment. It’s a structured, government-backed financial zone created to remove these frictions. Once you’re investing through GIFT City, you’re no longer dealing with the same old maze of regulations, tax confusion, and currency friction.
Whether you’re an NRI in Dubai wanting to diversify or an England-based HNI managing global portfolios, GIFT City offers you ease, efficiency, and real tax advantages.
Now, let’s break down what makes GIFT City so powerful, one advantage at a time.
Capital Gains Tax? In Many Cases — Zero.
One of the biggest reasons investors are turning their eyes (and dollars) towards GIFT City is zero capital gains tax on certain types of investments.
If you’re a non-resident, whether NRI, OCI, or even an FPI, and you invest through IFSC exchanges like NSE IFSC or India INX, you may not have to pay any capital gains tax on profits made from equity shares, mutual fund units, ETFs, or even derivatives.
So yes, if you decide to invest a chunk of your funds in, say, a US equity-focused mutual fund listed at GIFT, and it performs well you keep all the gains. Clean. Clear. Tax-free. That’s the kind of investor-friendly setup that’s been thoughtfully built into this ecosystem.
Dividends Without the TDS Hassle
Now here’s another relief. Traditionally, dividends earned in India would be taxed, and for NRIs, that often came with automatic TDS deductions, sometimes without clear visibility or recovery paths.
But with GIFT City, things work differently. When you receive dividend income through an IFSC-based fund or PMS, and that money is paid to you in foreign currency, there’s no withholding tax at all.
No cuts, no complications, just the full dividend amount, straight to your account.
Interest Income That’s 100% Tax-Free
For those who prefer safer instruments or want to park emergency funds in a reliable, interest-earning vehicle, GIFT City offers another incentive.
If you hold a foreign currency account with an IFSC banking unit, any interest income you earn is completely tax-exempt—as long as you’re a non-resident.
So whether you’ve kept aside some surplus in USD, AED, or any other currency, that amount can quietly earn interest while you stay worry-free about tax deductions. It’s ideal for NRIs who like their money to be parked smartly and work efficiently, without unnecessary tax interruptions.

Bonus: No GST, STT, or CTT
Yes, you read that right. No GST, STT, or CTT for GIFT city investors!
Investing or trading through GIFT City doesn’t just give you tax benefits on income—it also saves you on transaction-level costs that quietly add up elsewhere.
Here’s what you don’t pay:
- No Securities Transaction Tax (STT)
- No Commodity Transaction Tax (CTT)
- No GST on financial services
For anyone trading in higher volumes—or even regularly—this makes a real difference. In traditional markets, these charges nibble away at your profits. In GIFT City, they don’t exist.
It’s clean, efficient, and built to favour global investors looking for ease and economy.
My Take
For years NRIs wanted to be a part of India’s growth story. GIFT city has now opened that gate gracefully.
If you’ve been sitting on the fence, unsure about tax implications or compliance nightmares, now is the time to set your investment priorities straight. Whenever you are ready to take the next step or if you want any clarity on the topic, team MoneyAnna is always here to guide and walk every step of the way.
Frequently asked questions (FAQ)
There’s no fixed minimum tenure, but keep in mind that most funds apply an exit load of 1% to 2% if you redeem your investment within two years. So while you’re free to exit early, it may come with a small cost.
The minimum investment starts at USD 1,50,000. This is in line with the Liberalised Remittance Scheme (LRS) limits and ensures that GIFT City remains focused on serious, long-term investors.
Inbound Funds are designed for NRIs or foreign investors who want to invest in Indian markets. They can invest in equities, mutual funds and debt instruments while staying abroad.
On the other hand, Outbound Funds, are for resident Indians who wish to invest in global markets such as US stocks, global ETFs, or international funds without opening foreign accounts or going through complex paperwork.