The union budget 2016 announcements have brought some interesting updates for investors & stakeholders of Indian realty. We bring to you a crisp summary of the announcements & what do they mean to you.
First we have a look at Two major budgetary announcements related to IFSCs (International Financial Services Centre):
1. Minimum Alternate Tax applicable to IFSC is 50% of existing rate – 9 % for an IFSC & 18.5 % otherwise.
2. Tax waivers –
Foreign currency sale of equity shares
Sale of units of equity oriented funds
Sale of units of business trust
Sale of commodity derivatives of recognized association established within an IFSC
Now, a little bit info on IFSC that you need handy when thinking about investing here –
India’s proposed first IFSC, the GIFT city in Gujarat, is part of a multi service special economic zone being built in an area approximately 900 acres.
The SEZ itself is divided in 4 parts –
Consists of IFSC apart from offshore banking, BPO/KPOs, Data centers amongst other services.
Non – processing area
That has service apartments, related commercial buildings, hostels & entertainment centers, training centers.
Financial, technology, exchange & corporate enclaves & world trade center
Schools, clubs, convention centers
What is special about IFSC ?
It is a deemed foreign territory, that is expected to give a big push to foreign currency transactions with the aid of special tax regime.
It will help most of the major banks strengthen their foreign currency operations.
The vision here is to capitalise on the in house financial accumen – as mentioned in the GIFT city corporate presentation that you can access here – http://bit.ly/GIFTCity-Superise
The center is expected to generate 11000 jobs & boasts of a targetted market capitalization of $ 1800 billion by the year 2020, not far from now.
Where is GIFT located?
At Gandhinagar, Gujarat, 12 km from Ahmedabad international airport.
Which banks are setting up shop here?
1. Already operationalized –
2. Nearing the start of operations –
State Bank of India
3. Other banks & institutions expected very soon –
Bank of India
Bank of Baroda
Punjab & Sind Bank
Brigade Group from Bengaluru
Sterling Group from Ahmedabad
World Trade Centre from Noida
How do the tax numbers stack up against International tax regimes in other IFSCs?
Dubai – Has zero tax for 50 years
Malaysia charges 3 percent tax
Singapore increased it to 10 percent from 5 percent.
How is this news being perceived?
There is a very positive reaction from within the industry about the clarity in taxes that this news has brought to IFSCs.
We at Superise.com feel that the time is the most ripe for investing in/ starting operations at this IFSC. We are here to be with you through this journey & our team is available at firstname.lastname@example.org just in case you are ready to consider this opportunity.