A real estate GIFT in Budget: Tax incentives to boost GIFT City’s real estate growth, attract global investors

Mumbai: Budget’s series of tax proposals and incentives for the International Financial Services Centre at GIFT City are expected to significantly boost real estate development as these measures aim to position the region as a global financial hub, attracting international investors, fund managers, and leasing companies. The extension of key tax concessions until March 31, 2030, for various IFSC-related activities-such as fund relocation, investment banking, and aircraft and ship leasing-are expected to encourage foreign businesses to establish operations in GIFT City. This is likely to create higher demand for commercial real estate, office spaces, and residential developments catering to expatriates and financial professionals.

“With strong and consistent demand in GIFT city, an influx of over 1 lakh people can be envisioned in the next five years, which can directly absorb 10-12 million sq ft of real estate space. This will need direct investment of over ₹10,000 crore in the next five years. With Grade A infrastructure, buildings, and tenants, the city will also attract the much-required social infrastructure,” said Jaxay Shah, founder & CMD, Savvy Group.

With the inclusion of retail mutual fund schemes and ETFs in the existing relocation regime, IFSC is set to attract a larger number of India-centric funds. This move is expected to enhance the overall investment ecosystem, generating demand for high-end offices.

“The tax incentives and regulatory simplifications will attract global investors, fund managers, and businesses, strengthening India’s financial ecosystem. With these measures, GIFT City is set to become a competitive and business-friendly destination on the global financial map. It will play a key role in driving India’s growth in the international financial services sector,” said Tapan Ray, MD & Group CEO, GIFT City.

The exemption on capital gains and dividends for ship leasing units within IFSC aligns with the government’s vision of developing GIFT City as a ship leasing hub.