In the Union Budget 2026‑27, the Indian government announced a major extension of tax benefits for businesses operating in the Gujarat International Finance Tec‑City (GIFT City) International Financial Services Centre (IFSC). The tax holiday, which previously lasted 10 years, will now be extended to 20 years to make the financial hub more appealing to both domestic and international firms.
Under this new rule, new companies in the GIFT City IFSC will get a 100% tax exemption on their income for 20 years out of a 25-year period. After this period, these companies will pay a reduced tax rate of 15%, which is much lower than the normal corporate tax rates in India, which range from 25% to 38%.
This change is especially important for banks and financial firms whose initial 10-year tax breaks were about to end. Big banks, including the State Bank of India and Bank of Baroda, had asked for clarity on future tax rules. Extending the tax holiday gives companies long-term certainty, encouraging them to continue and expand operations in GIFT City.
Industry leaders welcomed the move, saying it will strengthen India’s position as a global financial hub. The extended tax break is expected to attract more banks, asset managers, reinsurers, and investment firms to set up offices or grow their business in the IFSC. GIFT City has already been growing steadily, with more companies registering in banking, investment, and fund management sectors.
The new tax incentives will apply starting April 1, 2026, covering the 2026‑27 financial year and beyond. This step is part of a wider effort in the budget to boost India’s financial markets, attract international investment, and make the country more competitive globally.