Lok Sabha Question No. 4637 (UNSTARRED), answered on 2018-03-23
Subject: IFSC
Ministry: FINANCE
Asked by: POONAM  MAHAJAN

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOKSABHA UNSTARRED  QUESTION  NO, 4637 TO BE AIISWERED  ON FRTDAY,  MARCH  23, 20l8/CITAITRA 02' 1940 (SAKA)

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## "IFSC" OTIESTION

## N{,fl to*n',  PooNAM  MAHAJAITT:

Will the Mnister of FINANCE  be pleased to state:

- (a) Whether  the Govemment  has set up Intemational  Financial  Services Cenhes  (IFSC) under the aegis of Special Economic Zones in the country;
- (b) if so the details thereof and the locations  identified  for the same;
- (c)  whether  the Goveflrment has enacted  legal frameworks in order to regulate  and govem such centres  and if so, &e details  thereof;  and
- (d) The manner  in which  the Govemment  is likely to incentives  private institutions to set up branches  in such financial centres?

## AI{SWER MIMSTER OF STATE IN THE MINISTRY  OF FINAI\ICE (SHRI SHIV PRATAP  SIIUKLA)

(a) and (b): Section  I 8 of the Special Economic Zones (SEZ) Act, 2005 provides for the setting up of art tnt"mational  Financial  Services  centre (IFSC) in an SEZ.  Subsequent to the aPProval received under the SEZ Act, the country's first IFSC has become operational at the Gujarat Intemational Finance Tec-City  (GIFT), Gandhinagar.

(c): Guidelines and regulations have been brought  out by the sectoral Minishies/  Regulators,  viz, t Ainirtry of Corporate Affai$, Reserve Bank of India, Securities  and Exchange Board of India and Insurance Regulatory Development Authority of India with a view to facilitate  the setting  up of businesses in iFSC. The t]nion Budget  2018-19  armowrced  the establishment  of a unifred authority for rggulating all financial  services in IFSCs  in India-

- (d): with a view to facilitate setting up of businesses in the IFSC,  the following tax berefits  were annourced  in Union Budget 2016-17:
- . The companies located  in IFSC shall not be liable to Dividend Distibution  Tax'
- r Minimum  Altemate Tax shall be charged at the rate of nine per cent from units located in IFSC.
- o The transaction in foreign  crnrency of sale of equity  share  or units  of equity oriented funds or units ofa business trust taking place on a recog!.ized  stock exchange established  in IFSC shall not be liable to Securifies  Trarsaction  Tax. The gains arising from transfer ofsuch  long term capital  asset shall be exempt  from tax.

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- . The transaction  in foreign cum€ncy  of sale of oommodity  derivatives. taking place on a recogrized  association  established in IFSC shall not be liable to commodity  tansaction  tax'

Additionally,  in Union Budget  2018'19, the following  tax benefits  were announced  :

- r Transfer of derivatives  and certain securities  by non-residents  shall be exempt from capital gairs tax.
- . Non-corporale taxpayers operating in IFSC shall be charged Altemate Mi*TY. T* lerrar) "t  "on".,sional rate or rzo a-t par wittr Mnimum  Altemate  Tax (MAT)  applicable  for cotporates.

Apart from the above,  prevailing financial conces-sions.as  per the Special E9on911c lory1Act' idOi una m" Special  ii,conomic Zones Rules, 2006 will be applicable  to IFSCs  within the SEZs'