BUDGET
To double 100% tax deduction timeline to 20 years for IFSC units
This story was originally published at 16:42 IST on 1 February 2026
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NEW DELHI – In order to increase the competitiveness of the International Financial Services Centre, the Union Budget for 2026-27 (Apr-Mar) has proposed to increase the period of 100% tax deduction for income for units in IFSC to 20 consecutive years out of 25 years and for offshore banking units to 20 consecutive years. Earlier, the 100% tax deduction on income for IFSC units was available for 10 consecutive years out of 15, and for offshore banking units 10 consecutive years.
The Budget has also proposed that the business income of these IFSC units will be taxed at 15% after the expiry of the deduction period. Further, the government has proposed to rationalise the provisions of deemed dividend applicable to treasury centre in IFSC, saying that provisions of deemed dividend will not be applicable if the parent entity or the principal of the group is listed in a country or territory outside India or such parent entity and other group entity to the transaction is located in a country or territory outside India. End
Reported by Pratiksha
Edited by Saji George Titus
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