Govt to support fintech hub development in IFSC-GIFT; announces tax incentives

The government on Monday said it would support the development of a world-class fintech hub at international financial services centre (IFSC) in GIFT-City, a move that will promote financial technology (fintech) start-ups.

In addition, Finance Minister Nirmala Sitharaman has announced several tax exemptions to IFSC.

The fintech hub will facilitate research, innovation and development of new-age skills in fintech, which will help in creating new job opportunities and attract quality talent to GIFT-City, said Tapan Ray, MD and Group CEO of GIFT City.

''The government would support the development of a world-class fintech hub at the GIFT-IFSC,'' the finance minister said while presenting the Union Budget 2021-22.

She further emphasised that the government is committed to making the IFSC in GIFT-City, a global financial hub.

In addition to the tax incentives already provided, the government proposed to include, among others, tax holiday for capital gains for aircraft leasing companies, tax exemption for aircraft lease rentals paid to foreign lessors and tax incentive for relocating foreign funds in the IFSC.

Also, it has been proposed to allow tax exemption to the investment division of foreign banks located in IFSC.

The country's only IFSC is located in GIFT-City in Gandhinagar.

''The tax announcement would help in attracting global players in the fund business, aircraft leasing and financing business and offshore investment banking sector to set up their base in GIFT IFSC,'' Ray said.

He further said the development of world-class fintech hub at GIFT-City announced in the Budget will go a long way in promoting and developing fintech start-ups. GIFT City would provide a platform to fintech firms to expand globally.

India INX MD and CEO V Balasubramaniam said this Budget saw the government's strengthened support to make GIFT IFSC one of the leading international financial centres at par with London, New York, Hong Kong, Singapore and Dubai.

''The additional tax holidays to aircraft leasing companies and those relocating foreign funds to IFSC-GIFT along with setting up of a new fintech hub will drive more players to GIFT IFSC, boost investor confidence and give an impetus to the GIFT City project,'' he added.

Lalit Mehta, co-founder and CEO of Decimal Technologies, is of the view that the fintech hub in the GIFT-City is a great step towards enabling the fintech industry and shows the government's recognition of fintech as a significant play in the financial sector.

''This should set the road for creation of the required regulations and frameworks for fintech to work with conventional lenders and banks,'' he added.

The plan for a world-class fintech hub looks promising and it will be interesting to see the implementation, Amit Dhakad, co-founder, CEO and CTO of Market Pulse, said.

He added that doubtless, its establishment can be a crucial change for developments around the Indian fintech space and connecting it to global advancements.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)