Ahmedabad: Gujarat’s GIFT City has received a major boost in Budget 2026, with Finance Minister Nirmala Sitharaman announcing a 20-year tax holiday for entities operating in the city. The move is expected to accelerate the development of Prime Minister Narendra Modi’s visionary project and strengthen GIFT City’s position as a global fintech hub. The CEO of GIFT City welcomed the announcement enthusiastically.
What the Finance Minister Announced
In her Budget 2026 speech on Sunday, Finance Minister Nirmala Sitharaman said that to enhance the competitiveness of the International Financial Services Centre (IFSC), the deduction period under Section 147 will be extended. Units in IFSC will now enjoy a 20-year consecutive tax holiday, up from the previous 10 years, while Offshore Banking Units (OBUs) will also benefit for 20 consecutive years. After the holiday period ends, these units will be taxed at a concessional rate of 15% on their business income. By comparison, foreign companies starting operations elsewhere in India are subject to tax rates of around 35% on their income.
The state government has also provided facilities to attract global companies, including exemptions in liquor regulations within GIFT City.
About GIFT City
GIFT City, or Gujarat International Finance Tec-City, is located in Gandhinagar, about 12 km from Ahmedabad. India’s first operational smart city and offshore-style financial center, it is designed to host global financial services and fintech companies. The city is connected by metro and situated 19 km from the Sabarmati railway station, the final stop of the Mumbai-Ahmedabad bullet train.
Sanjay Kaul, Managing Director and Group CEO of GIFT City, welcomed the Finance Minister’s announcement, saying it provides long-term tax certainty for businesses operating from India’s first IFSC. “This step will enhance India’s offshore financial competitiveness and strengthen GIFT City’s recognition as a global-level financial destination,” he added.
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