GIFT City: Legal and Tax Framework for NRIs
Budget 2025 reforms boost insurance-linked investments
Digital access simplifies global wealth management
By Vishwas Kumar
New Delhi: April 28, 2026:
NRIs investing through GIFT City now enjoy a powerful mix of global market access and tax exemptions, thanks to Budget 2025’s reforms under Section 10(10D). This makes Gandhinagar’s IFSC a strategic hub for cross-border wealth creation.
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Key Legal and Regulatory Highlights
- GIFT City IFSC Framework
- Operates under a separate regulatory regime distinct from domestic Indian financial laws.
- Allows NRIs to invest in foreign currency-denominated products (USD, Gold ETFs, Silver ETFs).
- Provides seamless repatriation and unified compliance.
- Income Tax Act – Section 10(10D)
- Budget 2025 introduced full tax exemption on maturity proceeds of investment-linked insurance policies issued via IFSC.
- Condition: Premium must not exceed 10% of the sum assured.
- This exemption strengthens the appeal of insurance-linked investments for NRIs.
- Double Taxation Avoidance Agreements (DTAA)
- NRIs benefit from DTAA provisions, reducing the risk of being taxed both in India and their country of residence.
- Ensures smoother compliance and better net returns.
- Ease of Access Rules
- NRIs can invest directly through NRE or overseas bank accounts.
- Remote KYC and digital onboarding eliminate physical presence requirements.
- Policies include waiver-of-premium clauses to safeguard continuity in case of unforeseen events.
Analytical Perspective
GIFT City’s legal framework is designed to replicate the advantages of offshore hubs like Singapore or Dubai but within India’s jurisdiction. By combining tax-free maturity benefits, DTAA protection, and USD-denominated products, it creates a compelling case for NRIs seeking diversification.
The reforms also align with India’s broader strategy of positioning GIFT City as a global financial hub, reducing capital flight, and attracting foreign currency inflows. For NRIs, the ability to manage investments digitally while enjoying Indian regulatory protection is a significant competitive edge.
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FAQ: Legal Points Simplified
Q1. What is GIFT City IFSC?
It is India’s International Financial Services Centre in Gandhinagar, operating under a special regulatory framework that allows NRIs to access global financial products.
Q2. What tax benefits apply to insurance-linked investments?
Under Section 10(10D), maturity proceeds of eligible policies issued via IFSC are fully tax-exempt, provided premiums do not exceed 10% of the sum assured.
Q3. Can NRIs invest directly without Indian residency?
Yes. NRIs can use their NRE or overseas bank accounts, complete remote KYC, and invest digitally without being physically present.
Q4. How does DTAA help NRIs?
Double Taxation Avoidance Agreements prevent NRIs from being taxed twice—once in India and again in their country of residence.
Q5. Are investments only in insurance products?
No. NRIs can also access international funds, Gold ETFs, Silver ETFs, and other global instruments through GIFT City.
Q6. What safeguards exist for policy continuity?
Some policies include waiver-of-premium clauses, ensuring investments continue even if the policyholder faces financial or health challenges.
Conclusion
GIFT City’s legal and tax reforms have transformed it into a strategic investment hub for NRIs, offering tax-free insurance-linked products, global market access, and simplified digital compliance. With Budget 2025’s exemptions and DTAA protections, it is poised to rival international financial centers while keeping investments within India’s jurisdiction.
This makes GIFT City not just a tax haven, but a regulated gateway for global wealth creation tailored to the needs of NRIs.