Is a GIFT City unit taxed like the rest of India?
No, and that is the point of it. India's international financial services centre operates on a different tax and regulatory basis from the rest of India, so for planning purposes it behaves as a distinct jurisdiction. Units established there can access specified exemptions and concessions, but each is subject to conditions, and the conditions are where the analysis lives. Before treating the centre as a low-tax location, establish which concession you are actually relying on, what it requires, and how long it is available for. A general description of the regime is not a basis for a structure.
What activities can an IFSC unit actually carry on?
Permitted activities are defined, and the common use cases are fund and treasury structures. An entity cannot simply carry on whatever business it likes from within the centre and expect the concessions to follow. So the first check is a match between the business you intend to run and the activities a unit is permitted to undertake, followed by the eligibility conditions attaching to the particular relief you want. Where the intended business only partly fits, the realistic options are to restructure the activity or to accept that part of it sits outside the regime.
Do the concessions last for the life of the unit?
Not necessarily. Particular concessions have their own availability periods, and the sunset of one of them can change the arithmetic of a structure that was built around it. That makes timing part of the decision rather than a detail. A unit set up to capture a relief that is closing may not repay the cost of establishing and running it. Check which relief you are relying on, what conditions it carries and how long it runs, before committing to the structure rather than after the unit exists.
Is GIFT City worth it for a small fund?
It depends on whether the concessions you would actually use outweigh the cost of eligibility. A unit has to be established, it has to carry on a permitted activity, and it has to meet the conditions of each relief it claims, all of which carry running cost. Fund and treasury structures are the common use cases because those are the businesses where the reliefs bite hardest. For a smaller vehicle the honest test is to price the compliance first and compare it with the benefit, rather than the other way round.
Can my existing Indian company just move into the IFSC?
Treat it as establishing a unit rather than relocating an address. A unit there is a separate proposition with its own eligibility conditions and its own permitted activities, and none of that follows from the company already existing in India. Moving an existing business in raises questions about what transfers, what stays behind, and how the transfer itself is taxed under ordinary Indian rules. Work the eligibility and permitted-activity questions first. If the business does not fit, the transfer analysis never becomes relevant.
Does a unit there change my reporting at home?
Almost certainly. A holding or an interest in a fund or treasury vehicle in the centre is a foreign interest from the perspective of the country you are resident in, and that country applies its own rules to it regardless of how the income is treated in India. Information reporting is the part people miss, because the concession being relied on sits in one country while the reporting obligation sits in another. Map the home-country consequences alongside the Indian ones before the structure is fixed.
How do I actually stop being taxed twice?
In this order. Fix your residence under each country's own rules, and if both claim you, apply the treaty tie-breaker. Identify where each type of income is sourced. Read the article that covers that income type, because it decides who taxes and at what maximum rate. Then claim the relief on the residence-country return, with proof of the foreign tax. Most of the tax people lose to double taxation is lost at the last step, not the first. See how double taxation is relieved.
Branch or subsidiary — which should we use to expand?
A branch keeps one taxpayer: results consolidate at home, losses are usable sooner, and the exposure is that the branch is a permanent establishment whose profit the host country taxes, sometimes with a branch tax on repatriation. A subsidiary is a separate taxpayer with limited liability and local rates, at the cost of withholding on dividends home and transfer pricing on everything between them. The deciding facts are usually expected losses, liability and exit plans. See branch against subsidiary.
