GIFT City Investing 2026: A Guide for NRIs and Resident Indians
Last updated: 13 October 2026
Quick answer: GIFT City investing means buying dollar-denominated funds, US stocks, PMS or foreign-currency deposits through India's International Financial Services Centre in Gandhinagar, regulated by IFSCA. NRIs can invest freely and many products are exempt from Indian tax. Residents must use the LRS (USD 2,50,000 a year), pay 20% TCS above ₹10 lakh, and are taxed on gains in India.
Last updated: 13 October 2026 Quick answer: GIFT City investing means buying dollar-denominated funds, US stocks, PMS or foreign-currency deposits through India's International Financial Services Centre in Gandhinagar, regulated by IFSCA. NRIs can invest freely and many products are exempt from Indian tax. Residents must use the LRS (USD 2,50,000 a year), pay 20% TCS above ₹10 lakh, and are taxed on gains in India. Key takeaways Regulator: the International Financial Services Centres Authority (IFSCA), not SEBI or RBI directly. Low minimums: some IFSC retail funds start at USD 500; PMS at USD 75,000 since the 2025 regulations. Residents: since RBI's 10 July 2024 circular, LRS money can go to IFSC for any permitted financial product. TCS: nil up to ₹10 lakh a year, 20% above that for investments, adjustable in your return. NRIs: IFSC retail schemes and ETFs are "specified funds" with tax benefits for non-resident unit holders since Budget 2024. US stocks: NSE IX offers fractional US shares in dollars to residents under LRS. A software engineer in Seattle wants to invest in Indian equities without the PFIC paperwork of Indian mutual funds and without converting dollars into rupees. A Pune business owner wants Apple and Microsoft in his portfolio but would rather stay inside an Indian regulatory system. Both are being told the same thing by their banks: try GIFT City. GIFT City is Gujarat International Finance Tec-City, home to India's only operational International Financial Services Centre (IFSC). For exchange-control purposes it is treated as offshore, even though it sits in Gandhinagar. This guide explains what you can buy there, how money moves in and out for NRIs and residents, the tax rules as of October 2026, and when it actually makes sense. What is GIFT City investing, and who regulates it? GIFT City investing is buying financial products issued or held inside the IFSC, usually in US dollars. Products include mutual-fund-like retail schemes, AIF-style funds, portfolio management services, exchange-traded US stocks, bonds and foreign-currency deposits with IFSC Banking Units (IBUs) of banks such as SBI, HDFC Bank and ICICI Bank. A single regulator, IFSCA, oversees banking, capital markets, funds and insurance inside the IFSC. It notified the IFSCA (Fund Management) Regulations, 2025 in February 2025, lowering the minimum fund corpus to USD 3 million and the PMS minimum ticket to USD 75,000 from USD 150,000. GIFT City investment options and minimum investment amounts for funds, PMS, deposits and US stocks The main product types Product What it does Typical minimum Best suited to Retail schemes (inbound) Dollar fund investing in Indian equities or debt From about USD 500 NRIs wanting India exposure in dollars Retail schemes (outbound) Dollar fund investing in global equities, often as feeder funds Often around USD 5,000 Residents and NRIs seeking global diversification Restricted schemes (AIF-style) Private equity, credit, long-short strategies Much higher; check the placement memorandum HNIs and accredited investors PMS Individually managed portfolio USD 75,000 HNIs wanting a customised global or India portfolio US stocks via NSE IX Fractional US shares and ETFs, held in a GIFT demat No fixed minimum Residents using LRS for direct US equity IBU foreign-currency deposits Fixed deposits in USD, GBP, EUR and other currencies Often around USD 1,000 NRIs parking foreign currency Minimums vary by scheme and change often, so read the offer document. For background on funds that invest abroad from India, see our guide to international fund of funds (/insights/fund-of-funds-international-fof) . Can resident Indians invest in GIFT City? Yes, through the Liberalised Remittance Scheme. Until mid-2024, residents could send LRS money to the IFSC only for securities and certain education fees. RBI's A.P. (DIR Series) Circular No. 15 of 10 July 2024 widened this: residents can now remit to the IFSC to use any financial product or service permitted there, and open a foreign-currency account in the IFSC. The overall LRS limit of USD 2,50,000 per person per financial year still applies, and GIFT City remittances count towards it. Our LRS and TCS guide (/insights/lrs-tcs-overseas-investing-india) covers the full rules. How much TCS will you pay? For tax year 2026-27, banks collect no TCS on the first ₹10 lakh of LRS remittances in a year. Above that, investment remittances attract 20% TCS. Education and medical remittances above ₹10 lakh attract 2% after Budget 2026. TCS is not an extra tax: it shows in your tax statement and is adjusted against your final liability, or refunded through your return. Example: Rohan, a Pune resident, sends ₹25 lakh to a GIFT City global fund in October 2026. The first ₹10 lakh carries no TCS; 20% on the next ₹15 lakh is ₹3 lakh. He gets that ₹3 lakh back as a credit when he files his return, but it is blocked until then. Spreading remittances across family members, each with their own ₹10 lakh threshold, reduces the cash-flow hit. Bar chart showing TCS of ₹3 lakh on a ₹25 lakh LRS remittance to GIFT City How do NRIs invest in GIFT City, and what are the tax benefits? NRIs do not use LRS. They open an account with an IBU or an IFSC broker, complete KYC (video KYC is being piloted for NRIs in several countries), and wire money directly from a foreign bank account. NRE and NRO accounts are generally not the route. Money in an IBU account can usually be moved back abroad without the USD 1 million NRO cap or the Form 145/146 paperwork. The tax angle is the main draw. Budget 2024 brought IFSCA-regulated retail schemes and ETFs into the definition of "specified funds", extending fund-level tax exemptions to the extent of non-resident unit holders. Combined with existing exemptions on certain IFSC securities and deposits, many IFSC products leave a non-resident with little or no Indian tax. Banks also market IBU deposit interest as free of Indian tax for non-residents. Two caveats. First, your country of residence may still tax the income; the UAE does not tax individuals, but the US, UK and Canada do. Second, for US persons, an IFSC fund is still a non-US pooled fund and can raise the same PFIC reporting issue as Indian mutual funds. Our guide on NRIs in the US and Canada investing in Indian mutual funds (/insights/nri-us-canada-mutual-fund-investment) explains PFIC. GIFT City investing comparison for NRIs and resident Indians: LRS, TCS, tax and repatriation GIFT City fund vs an Indian mutual fund for an NRI Feature Indian mutual fund via NRE/NRO IFSC retail fund Currency Rupees US dollars (or other foreign currency) Indian tax on equity gains 12.5% LTCG above ₹1.25 lakh; 20% STCG, with TDS Largely exempt for non-resident unit holders, scheme-dependent Repatriation Free from NRE; NRO capped at USD 1 million a year Generally free from IBU account Choice of funds Very wide Narrower, growing Costs SEBI TER caps apply Set by scheme; feeder funds may have two layers Illustration: on a ₹25 lakh long-term gain from an Indian equity fund, an NRI pays about ₹3.09 lakh in Indian tax (12.5% on gains above ₹1.25 lakh, plus 4% cess). A comparable gain in an exempt IFSC scheme would attract no Indian tax, though home-country tax and higher costs may narrow the gap. How can you buy US stocks through GIFT City? NSE International Exchange (NSE IX) began offering select US stocks in 2021 as unsponsored depository receipts, approved under IFSCA's regulatory sandbox, allowing fractional investing held in GIFT City demat accounts. NSE IX has since added a global access route where residents remit dollars to a designated GIFT City bank account and buy US stocks and ETFs through IFSC brokers. For a resident, the money still goes out under LRS with the same TCS. Gains are taxed in India like any foreign shares: held over 24 months, 12.5% long-term; otherwise slab rate. Dividends are taxed at your slab rate, after US withholding that you can claim as a credit. See how to invest in US stocks from India (/insights/invest-us-stocks-from-india) for a broader comparison with overseas brokers and US ETFs. One open question is whether holding US shares through an IFSC structure changes US estate-tax exposure. Our article on the hidden risks of foreign investing (/insights/foreign-investing-tax-estate-risk-india) explains the issue; take specific advice before investing large sums. How are residents taxed on GIFT City investments? Residents get no special exemption. An IFSC fund investing abroad is treated much like any foreign or unlisted holding: gains on units held more than 24 months are long-term and taxed at 12.5% without indexation; shorter holdings are taxed at your slab rate. There is no ₹1.25 lakh equity exemption, which applies only to Indian listed equity and equity-oriented funds. Keep purchase dates, amounts and exchange rates, because gains are computed in rupees. Disclosure of foreign assets in your return also matters; the treatment of IFSC holdings in Schedule FA should be confirmed with your CA. Our Schedule FA guide (/insights/foreign-assets-schedule-fa-india) explains why missed disclosures are costly. Six steps to start GIFT City investing: product, KYC, account, LRS funding, investing, tax reporting Is GIFT City investing worth it? It depends on who you are. NRIs in low-tax countries: often a strong case for dollar-denominated India exposure and foreign-currency deposits, given the Indian tax exemptions and easy repatriation. NRIs in the US: weigh the PFIC reporting cost; a US-domiciled India ETF can be simpler. Residents wanting global equity: a credible route, especially since domestic international funds have repeatedly hit industry overseas limits. But TCS, the 24-month holding rule and slab-rate short-term tax apply just as with any overseas investment. Small investors: fund choice is still narrow, and costs can be higher than Indian index funds. Watch for three risks: currency (a rupee rally reduces your returns in rupee terms), liquidity (many IFSC schemes are new, with small corpora), and complexity (another account, another statement, another tax schedule). Treat GIFT City as one tool in a global diversification plan (/insights/global-diversification-indian-investors) , not a reason to invest abroad by itself. Related reading LRS, TCS and overseas investing (/insights/lrs-tcs-overseas-investing-india) How to invest in US stocks from India (/insights/invest-us-stocks-from-india) NRE vs NRO vs FCNR accounts (/insights/nre-vs-nro-vs-fcnr-accounts) NRI property sale: TDS and repatriation (/insights/nri-property-sale-tds-repatriation) NRI taxation in India (/insights/nri-taxation-india-guide) Global investing with Money n Wealth (/products/global) Frequently Asked Questions Is GIFT City investing safe? GIFT City products are regulated by IFSCA, a statutory authority set up under the IFSCA Act, 2019, and are offered by regulated fund managers, banks and exchanges. That reduces operational and fraud risk compared with unregulated platforms. It does not remove market, currency or liquidity risk, and IBU deposits are not covered by DICGC deposit insurance. What is the minimum investment in GIFT City mutual funds? It varies by scheme. Some retail schemes investing in India accept about USD 500, while outbound global funds often ask for around USD 5,000. Closed-ended retail schemes that choose not to list need at least USD 10,000 per investor. PMS needs USD 75,000, and AIF-style restricted schemes are higher still. Does TCS apply on remittances to GIFT City? Yes, for residents. Remittances to the IFSC are made under LRS, so the usual TCS applies: nil on the first ₹10 lakh of LRS remittances in a financial year and 20% on investment remittances above that. TCS is credited against your income tax when you file your return. NRIs funding from abroad do not use LRS and pay no TCS. Are GIFT City funds tax-free for NRIs? Many are largely free of Indian tax for non-resident unit holders, because Budget 2024 treated IFSCA-regulated retail schemes and ETFs as specified funds with exemptions for non-residents. The exact treatment depends on the scheme, so read its tax disclosure. Your country of residence may still tax the income. Can residents buy US stocks through GIFT City? Yes. NSE IX lets resident Indians buy select US stocks and ETFs in dollars, including fractional quantities, held in a GIFT City demat account and funded under LRS. Gains are taxed in India as foreign shares: 12.5% if held over 24 months, slab rate otherwise. Dividends are taxed at slab rate with credit for US withholding. Does the LRS limit apply to GIFT City investments? Yes. Under RBI's 10 July 2024 circular, residents can remit to IFSCs for any permitted financial product, but within the overall LRS limit of USD 2,50,000 per person per financial year. Family members each have their own limit, so a couple can invest up to USD 5,00,000 a year between them. Sources: IFSCA: Fund Management Regulations 2025 press release (https://ifsca.gov.in/Document/Legal/press-release-notification-of-ifsca-fund-management-regulations-202519022025091920.pdf) ; RBI: LRS remittances to IFSCs (10 July 2024) (https://rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=12699) ; NSE: NSE IFSC to introduce trading in US stocks (https://www.nseindia.com/resources/nse-ifsc-to-introduce-trading-in-us-stocks) ; EY: Budget 2024 financial services alert (https://assets.ey.com/content/dam/ey-sites/ey-com/en_in/alerts_pdf/2024/07/ey-union-budget-2024-ey-alert-finacial-services.pdf) ; Tickertape: TCS on LRS for 2026-27 (https://www.tickertape.in/blog/tcs-on-foreign-remittance/) ; Finnovate: GIFT City investing for NRIs (https://www.finnovate.in/learn/blog/gift-city-investing-nri) . Worked examples are Money n Wealth calculations. Should part of your portfolio sit in GIFT City? The answer depends on your residency, tax home and existing global exposure. Talk to Money n Wealth (/contact) for a free portfolio review. This article is for general educational purposes only and does not constitute financial advice. Figures and examples are illustrative. Please consult a qualified financial adviser for guidance specific to your situation. Money n Wealth (Predics Fintech Services Pvt Ltd) is an AMFI-registered Mutual Fund Distributor (ARN-121995) and APMI-registered PMS Distributor (APRN07444); it is not a SEBI-registered investment adviser and may earn distribution commission on investments made through it.
Frequently Asked Questions
Is GIFT City investing safe?
GIFT City products are regulated by IFSCA, a statutory authority set up under the IFSCA Act, 2019, and are offered by regulated fund managers, banks and exchanges. That reduces operational and fraud risk compared with unregulated platforms. It does not remove market, currency or liquidity risk, and IBU deposits are not covered by DICGC deposit insurance.
What is the minimum investment in GIFT City mutual funds?
It varies by scheme. Some retail schemes investing in India accept about USD 500, while outbound global funds often ask for around USD 5,000. Closed-ended retail schemes that choose not to list need at least USD 10,000 per investor. PMS needs USD 75,000, and AIF-style restricted schemes are higher still.
Does TCS apply on remittances to GIFT City?
Yes, for residents. Remittances to the IFSC are made under LRS, so the usual TCS applies: nil on the first ₹10 lakh of LRS remittances in a financial year and 20% on investment remittances above that. TCS is credited against your income tax when you file your return. NRIs funding from abroad do not use LRS and pay no TCS.
Are GIFT City funds tax-free for NRIs?
Many are largely free of Indian tax for non-resident unit holders, because Budget 2024 treated IFSCA-regulated retail schemes and ETFs as specified funds with exemptions for non-residents. The exact treatment depends on the scheme, so read its tax disclosure. Your country of residence may still tax the income.
Can residents buy US stocks through GIFT City?
Yes. NSE IX lets resident Indians buy select US stocks and ETFs in dollars, including fractional quantities, held in a GIFT City demat account and funded under LRS. Gains are taxed in India as foreign shares: 12.5% if held over 24 months, slab rate otherwise. Dividends are taxed at slab rate with credit for US withholding.
Does the LRS limit apply to GIFT City investments?
Yes. Under RBI's 10 July 2024 circular, residents can remit to IFSCs for any permitted financial product, but within the overall LRS limit of USD 2,50,000 per person per financial year. Family members each have their own limit, so a couple can invest up to USD 5,00,000 a year between them.
Should part of your portfolio sit in GIFT City?
The answer depends on your residency, tax home and existing global exposure. Talk to Money n Wealth for a free portfolio review.
