Resident Indians: the LRS route
- RBI’s circular of 10 July 2024 allows remittances under the Liberalised Remittance Scheme to IFSCs for all permissible current and capital account purposes, including IFSCA-regulated financial products.
- The limit is USD 250,000 per person per financial year, across all LRS remittances.
- Money can be held in a foreign currency account with an IFSC banking unit.
- TCS: 20% on investment remittances above ₹10 lakh in a year. It’s credited against your income tax, but it reduces the cash you can invest until you claim it.
- Report the holdings in Schedule FA of your income-tax return.
NRIs and OCIs
- NRIs and OCIs invest as non-residents — no LRS limit.
- IFSC-based foreign portfolio investors can take up to 100% of their corpus from NRIs, OCIs and resident Indians, subject to declarations (SEBI, June 2024).
- For NRIs in the UAE, see our UAE page.
Foreign investors
Foreign individuals and institutions invest in GIFT City funds as they would in any offshore fund, with KYC through the fund manager. Many use GIFT City funds to get India exposure through a single India-regulated, dollar-denominated vehicle.
How returns are taxed
- Non-residents: specified income from IFSC funds and gains on specified securities traded on IFSC exchanges are exempt — see GIFT City tax benefits.
- Residents: generally taxed in India on their returns under the normal rules.
- Treaty relief in your country of residence depends on that country’s rules.
Before you invest
- Confirm the product is regulated by IFSCA and read its placement memorandum or offer document.
- Check the minimum investment — for example USD 150,000 for restricted schemes, USD 250,000 for venture capital schemes.
- For LRS, plan the timing of remittances around your annual limit and TCS.
- Keep the documents you’ll need for your tax return and Schedule FA.
Setting up a fund for investors like these? See GIFT City fund setup.
Frequently asked questions
Can resident Indians invest in GIFT City?
Yes. Since RBI's July 2024 circular, resident individuals can remit under the Liberalised Remittance Scheme to IFSCs for all permissible purposes, including IFSCA-regulated financial products, within USD 250,000 per financial year.
Is TCS charged on remittances to GIFT City?
Investment remittances under LRS above ₹10 lakh a year attract 20% TCS, which is creditable against the remitter's income tax.
Do NRIs need LRS to invest in GIFT City?
No. NRIs and OCIs invest as non-residents, so the LRS limit doesn't apply to them.
What is the minimum investment in a GIFT City fund?
It depends on the scheme: USD 150,000 for restricted schemes and USD 250,000 for venture capital schemes, with lower limits for the manager's employees and no minimum for accredited investors in venture capital schemes.
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.