Beyond the rupee
International investing through India's own offshore financial centre.
GIFT City is India's International Financial Services Centre: a jurisdiction where investments run in USD and other major currencies under the unified IFSCA regulator. For NRIs it removes much of the friction of investing into India; for residents and institutions it opens structured routes to global assets.
Layer 6 of 6 in the access spectrum
Currency
USD and major currencies, no forced rupee conversion
Regulator
IFSCA (unified regulator)
Ecosystem
400+ registered financial entities, 37+ banks
For NRIs
Simplified route vs. PAN/NRE/NRO friction
Convert a rupee amount at today's rate and see what room is left under the USD 250,000 annual limit.
Inputs
Result
The Liberalised Remittance Scheme allows USD 250,000 per resident individual per financial year; the bank's rate on the day of remittance applies.
Inbound: NRIs and foreign investors accessing Indian strategies in USD. Outbound: Indian investors accessing global funds through IFSC vehicles.
Accounts and funds inside GIFT City operate under IFSCA rules: a materially simpler stack than Form 15CA/CB and 45-day repatriation cycles.
Certain IFSC income enjoys specific exemptions for non-residents, but whether you benefit depends on where you are tax-resident. We'll flag what to verify with your chartered accountant.
A GIFT City fund is an India-domiciled scheme registered with IFSCA that takes subscriptions in US dollars or another foreign currency, invests in Indian or global assets, and returns proceeds in the currency you paid in.
Inbound funds pool capital from NRIs, OCIs, PIOs, overseas trusts, companies, family offices and institutions and deploy it into Indian equities, debt, private credit, real assets or unlisted companies.
Outbound funds let residents buy global equities, international bonds, thematic strategies and multi-currency portfolios without opening an account overseas.
Many GIFT City schemes are feeders: the IFSC vehicle collects subscriptions and passes them into a master fund, which may be an Indian AIF or a fund set up outside India.
LRS limit per person, per financial year
USD 250,000
The Liberalised Remittance Scheme ceiling for each resident individual. It does not apply to NRIs or OCIs, who invest from their overseas funds.
| Item | Non-resident | Resident (via LRS) |
|---|---|---|
| Category I and II AIF income | Pass-through: your share of gains, interest and dividends is taxed in your hands, not at the fund, and treaty benefits apply. | Pass-through as well, so you are taxed as if you held the securities directly at the usual Indian capital-gains and income rates. |
| Category III AIF income | Taxed at the fund level; you are generally not taxed again in India on redemption. | Fund-level tax is paid before your units are valued; no separate resident concession applies. |
| Dividends and interest | Concessional 10 per cent, against roughly 20 per cent for onshore investments. | Taxable at your slab rate with surcharge and cess. |
| TDS and treaty relief on distributions | TDS applies on Category I and II distributions. | TDS as applicable; you file as usual. |
Category I and II AIF income
Category III AIF income
Dividends and interest
TDS and treaty relief on distributions
A summary, not tax guidance; confirm your own position with a chartered accountant.
GIFT City · 7 min read
A plain guide to GIFT City (IFSC) funds: what they are, the AIF categories and scheme types, who can invest, how residents use LRS, currency, minimums, tax and the paperwork.
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GIFT City · 7 min read
A sober look at GIFT City taxation for non-residents and residents: which exemptions sit at the fund level, what reaches you, how repatriation compares with NRE and NRO accounts, and who the structure actually suits.
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NRIs who want India exposure without the traditional paperwork stack
Residents diversifying globally through regulated outbound funds
Investors holding foreign currency who don't want conversion drag
IFSC funds accept USD directly, cutting out rupee conversion, Form 15CA/CB cycles and much of the repatriation paperwork. You invest and redeem in dollars under IFSCA rules, and routine repatriation is not counted against the USD 1 million per financial year cap that applies to NRO accounts: the plumbing is simply shorter.
Yes, within the RBI's Liberalised Remittance Scheme limit, currently USD 250,000 per person per financial year, into eligible dollar-denominated funds and PMS managed from GIFT City. Not every GIFT City scheme accepts residents, so we check the fund's eligibility terms first and then help sequence the remittance and the fund paperwork together.
GIFT City is a jurisdiction, not a product. IFSCA, set up under the IFSCA Act, 2019, regulates the entities inside it the way SEBI and RBI do onshore, with quarterly reporting, KYC and AML rules and FATCA and CRS compliance. The underlying funds remain market-linked; the location changes the currency and paperwork, not the investment risk.
IFSCA, the unified regulator that covers securities, banking, insurance and pensions inside the IFSC. Fund managers register as Fund Management Entities under the IFSCA (Fund Management) Regulations, 2025 and may run retail schemes, restricted (non-retail) schemes and PMS depending on their registration category. SEBI rules come into play only where a GIFT City fund invests back into India through an FPI or similar route.
It depends on the scheme type. Most GIFT City AIFs are restricted (non-retail) schemes: the floor for eligible AIFs was reduced to USD 75,000 in February 2025, though many funds still set USD 150,000 and some vary by share class, while retail schemes are built for a broader investor base with tighter prudential limits. The fund documents prevail, so we confirm the ticket and share class before you remit.
Not automatically. For non-resident investors, Section 10(4D) of the Income-tax Act, 1961 (an exemption the Income-tax Act, 2025 continues) exempts specified income of qualifying IFSC funds, Category I and II AIFs in GIFT City are pass-through, securities traded on IFSC exchanges carry no STT and no Indian capital gains tax, dividend withholding is capped at 10% and interest from IFSC entities is exempt; the fund itself can claim a 10-year tax holiday within its first 15 years under Section 80LA. What you finally pay depends on the fund's structure and on your country of tax residence, where the income may still be taxable.
Money in a GIFT City fund sits in an offshore jurisdiction, so routine repatriation does not need Form 15CA or 15CB and is not counted against the USD 1 million per financial year NRO cap under FEMA. You invest and redeem in USD through the fund's bank account, and some funds do not need an NRE or NRO account at all, but the exact funding route is fund-specific. Check it in the Private Placement Memorandum before you wire anything.
Eligibility is set fund by fund. GIFT City funds follow FATCA and CRS reporting, so US residents have to weigh FATCA, PFIC and US tax reporting, Canadian residents their own reporting and tax rules, and UAE and UK residents mainly their home-country tax position; a fund being open to NRIs in general does not override those local rules. Whatever the country, a Tax Residency Certificate and Form 10F are what let you claim DTAA rates.
Currency exposure works both ways: USD assets add exchange-rate risk for rupee-based goals.
Tax outcomes depend on your residency and treaty position; verify before investing.
Underlying funds remain market-linked; the jurisdiction changes plumbing, not risk.
GIFT City products are offered under IFSCA regulations. Mutual fund and securities investments are subject to market risks; tax exemptions on certain IFSC income apply only to eligible non-residents and depend on individual tax residency.
That depends on your goals, horizon and what you already hold: exactly the conversation we start with.
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