A landmark regulatory change took effect April 1, 2026. Here is why it matters for every Indian investor with global ambitions.
6 min read · April 2026
Effective April 1, 2026
Starting April 1, 2026, mutual funds and ETFs domiciled offshore (Singapore, Mauritius, Luxembourg, Ireland) can relocate to GIFT City without triggering capital gains tax for existing investors. This is the most significant structural change to India's global investment landscape since LRS.
Apr 1
EFFECTIVE DATE
0%
CAP GAINS ON TRANSFER
10yr
TAX HOLIDAY (TO 2030)
0%
GST ON FIN SERVICES
WHAT CHANGED
The New RulesEffective April 1, 2026
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No capital gains tax on transfer
Funds relocating from Singapore, Mauritius, Luxembourg, Ireland to GIFT City trigger zero capital gains. Cost basis and holding period carry over.
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Income taxed at slab rates
Interest and dividends from GIFT City investments taxed at your applicable slab rates.
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Capital gains on sale taxed normally
STCG (under 24 months) at slab rate. LTCG (24 months+) at 12.5%.
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LRS and TCS unchanged
Investing in GIFT City still requires LRS. TCS 20% above ₹10L (fully adjustable).
"April 1, 2026 marks the day India's own financial centre becomes a genuine alternative to Singapore and Mauritius. Indian investors are the biggest beneficiaries."
WHY FUNDS WILL MOVE
The Incentivesfor Relocation
10-year income tax holiday
Extended through 2030. Operating costs far lower than Singapore or Mauritius.
9% MAT vs 15% elsewhere
Reduced Minimum Alternate Tax makes GIFT City structures more efficient.
No GST on financial services
All transactions within GIFT City exempt from GST.
Regulatory familiarity
IFSCA aligned with global best practices. Familiar for Indian promoters.
Proximity to Indian capital base
Eliminates cross-border servicing complexity while maintaining offshore character for FEMA.
TIMELINE
How We GotHere
Budget 2025
Tax-neutral relocation regime announced.
Finance Act 2025
Provisions enacted. Deferred to April 1, 2026.
April 1, 2026
Regime takes effect. Funds can relocate without triggering capital gains.
2026-2030
Tax holiday continues. Multiple fund houses expected to relocate.
WHO BENEFITS
What This Meansfor You
Indian investors in offshore funds
Your fund may move to GIFT City. No tax event. Indian regulatory oversight without losing global exposure.
Indian investors using LRS
More fund options in GIFT City. Lower costs, IFSCA-regulated, USD-denominated.
Fund managers
GIFT City becomes genuine alternative to Singapore/Mauritius. Tax holiday, no GST, proximity.
Valura users
Access growing GIFT City ecosystem alongside direct ETFs, equities, bonds, REITs, and pre-IPO.
FREQUENTLY ASKED
RelocationQuestions
Will my existing offshore fund automatically move?
No. Relocation is voluntary. Fund managers decide based on tax benefits, regulatory environment, and investor base. You will be notified.
Will I pay tax when my fund relocates?
No. Tax-neutral. Zero capital gains triggered. Cost basis and holding period carry over.
Does this affect SEBI-regulated mutual funds?
No. Only offshore-domiciled funds choosing to relocate. SEBI $7B cap remains separate and unchanged.
How does this benefit me?
More fund options in GIFT City, Indian regulatory oversight (IFSCA), USD-denominated, potentially lower operating costs passed to investors.
The future of global investing is Indian
GIFT City is the gateway. Valura is the bridge.
Valura is an IFSCA-registered broker-dealer at GIFT City. Access global equities, ETFs, mutual funds, bonds, REITs, and pre-IPO. Start from ₹10,000.
Disclaimer: Tax-neutral relocation regime effective April 1, 2026 per Finance Act. Tax laws subject to amendments. Consult a qualified tax advisor. Valura is an IFSCA-registered broker-dealer.
