The government will set up a unified authority for regulating all financial services in IFSC, which is situated at GIFT City in Gujarat, Finance Minister Arun Jaitley said today.
The move is expected to provide a further push to the International Financial Services Centre (IFSC) and lead to better regulation and supervision of the financial entities.
"The government will establish a unified authority for regulating all financial services in IFSCs in India," Jaitley said, while unveiling the Union Budget 2018-19.
IFSC at Gift City, which has become operational, needs a coherent and integrated regulatory framework to fully develop and to compete with other offshore financial centres, he said.
Ajay Pandey, Managing Director and Group CEO at GIFT City said: "The announcement of setting up of Unified Regulator for IFSC in India would help India achieve its full potential in the Global Financial markets."
Globally, most of the financial centers host unified regulator to promote these.
"The government's initiative duly supported by all existing regulators would go a long way in establishing GIFT IFSC as a global financial hub," Pandey said.
Jaitley said that in recent years, various measures including tax incentives have been provided in order to fulfil the objective of developing a world class IFSC in the country.
"To further this objective, I propose to provide two more concessions for IFSC. In order to promote trade in stock exchanges located in IFSC, I propose to exempt transfer of derivatives and certain securities by non-residents from capital gains tax," he said.
Further, non-corporate tax payers operating in IFSC shall be charged Alternate Minimum Tax (AMT) at concessional rate of 9 per cent at par with Minimum Alternate Tax (MAT) applicable for corporates.
Gift-City (Gujarat International Finance Tec-City) has been set up by the state government as the country's first IFSC that brings together world class infrastructure, connectivity, people and technology on a single platform for businesses across the world.
IFSC at GIFT City is probably the first such centre to be launched after the 2008 global financial crisis.
Last month, RBI Governor Urjit Patel had made a case for setting up a unified regulator and a world class legal framework for IFSCs to expeditiously deal with dispute resolution and other issues.