Frequently Asked Questions
1. What is GIFT City and why does it matter for investors?
GIFT City (Gujarat International Finance Tec-City) is India’s first International Financial Services Centre (IFSC), regulated by IFSCA. It allows Indian residents to invest in global index funds under the Liberalised Remittance Scheme (LRS), through a route that is completely separate from SEBI’s overseas mutual fund ceiling.
2. How much can I invest in GIFT City funds per year, and does TCS apply?
Under LRS, Indian residents can remit up to USD 2,50,000 per financial year for GIFT City investments. TCS of 20% applies only when your total LRS remittances for the year exceed ₹10 lakh, and it is fully creditable against your income tax liability when you file your ITR.
3. What is the tax treatment for GIFT City fund investments?
GIFT City global index funds are treated as foreign assets under Indian tax law. Long-term capital gains (holdings over 24 months) are taxed at 12.5% without indexation. Short-term gains (24 months or less) are added to your total income and taxed at your applicable income tax slab rate. Schedule FA disclosure is mandatory every year.
4. Which global index funds are available through GIFT City?
As of 2026, live options include the PPFAS IFSC S&P 500 Fund of Fund, PPFAS IFSC Nasdaq 100 Fund of Fund, DSP GIFT City Global Equity Fund, and Tata GIFT City Fund. HDFC Asset Management is expected to launch Developed Markets and Emerging Markets passive funds soon.
5. Is investing through GIFT City safe and regulated?
Yes. GIFT City IFSC is regulated by IFSCA (International Financial Services Centres Authority), an independent statutory regulator established under the IFSCA Act, 2019. Investment vehicles registered under IFSCA are not counted against SEBI’s overseas mutual fund ceiling.
6. Do I need a separate account to invest in GIFT City funds?
Yes. You need a Foreign Currency Account with a bank operating an IFSC Banking Unit in GIFT City, such as HDFC Bank, ICICI Bank, or Axis Bank, along with fresh KYC completed on the specific fund house’s dedicated GIFT City portal. Your existing domestic mutual fund KYC and demat account do not carry over.