Can Resident Indians Invest in GIFT City? A Complete Guide to Eligibility and Process

Yes, resident Indians can invest in GIFT City through the RBI’s Liberalised Remittance Scheme (LRS). This allows every resident individual to remit up to USD 2,50,000 abroad in a financial year. 

The money can be used to invest in GIFT City mutual funds, US stocks, global ETFs, dollar-denominated bonds and other eligible investments through regulated platforms.

This guide explains who can invest, what options are available, how to get started, the costs involved and how these investments are taxed.

Quick answer: Can Indian residents invest in GIFT City?

Yes. Any resident individual with a PAN can invest in eligible GIFT City products under LRS, including minors through a parent or guardian.

Here is what you need to know:

• Route: LRS, with a limit of USD 2,50,000 per person per financial year.
• Who cannot use LRS: HUFs, companies, partnership firms and trusts.
• What you can buy?: GIFT City mutual funds, US stocks, ETFs, dollar bonds and, for larger investments, AIFs and PMS.
• Minimum investment: Some GIFT City funds accept investments starting at USD 500.
• Main cost to plan for: 20% TCS on eligible LRS remittances above ₹10 lakh in a financial year. You can claim this amount as a tax credit or refund, subject to your tax position.

What is GIFT City and IFSC?

GIFT City stands for Gujarat International Finance Tec-City. Located between Ahmedabad and Gandhinagar, it houses a special financial zone called the International Financial Services Centre (IFSC).

Think of the IFSC as a financial zone within India where eligible transactions are conducted in foreign currencies, mainly US dollars. 

It has its own regulator, the International Financial Services Centres Authority (IFSCA), which oversees financial institutions, funds, brokers and insurers operating within the zone.

For you as an investor, this means you can access global investment opportunities without opening an account with a foreign broker.

GIFT City is also gaining recognition internationally. It climbed nine places to rank 37th in the Global Financial Centres Index (GFCI 40) in September 2026, up from 46th in the previous edition.

Also read: GIFT City Climbs to 37th in Global Financial Centres Index

Why are resident Indians looking at GIFT City now?

Until recently, investing abroad through a domestic international mutual fund was one of the simplest options. You could invest in rupees through a regular SIP without managing foreign currency transfers yourself. 

However, fresh investments in many such funds have become difficult. Indian mutual funds are subject to an industry-wide overseas investment limit of USD 7 billion, set by SEBI in 2008. 

The industry reached this limit in 2022. From July 2026, 54 of 66 international mutual funds were no longer accepting fresh investments, while several others had restrictions.

This has left investors looking for alternative ways to diversify internationally. The shrinking choice of international mutual funds for Indian investors explains why this has become a concern.

GIFT City funds operate under IFSCA rather than SEBI’s domestic mutual fund framework, so they sit outside the domestic mutual fund industry’s overseas investment limit.

For resident Indians who want to invest fresh money in global markets, this makes GIFT City an important alternative.

Who is eligible to invest in GIFT City?

The main question is whether you can use LRS. The RBI’s Liberalised Remittance Scheme FAQs explain the eligibility rules and permitted remittances.

There is no minimum income requirement or upper age limit for adult investors. You do not need to be a high-net-worth individual either. A young professional investing ₹50,000 and a retiree investing ₹20 lakh can follow the same basic route, provided they meet the product’s eligibility requirements.

Two points are worth remembering.

• Not every GIFT City product is open to resident Indians. Some schemes cater specifically to NRIs and overseas investors. Inbound funds invest in India and are generally designed for overseas investors, while resident Indians usually look at outbound funds that invest in international markets.
• The USD 2,50,000 limit covers all your LRS remittances. It is not a separate limit for GIFT City investments. Foreign travel, overseas education expenses, gifts to relatives abroad and eligible investments all count towards the applicable annual limit.

Anuj says, “Many investors assume GIFT City is meant only for NRIs or people with crores to invest. That is not the case. Resident Indians can access eligible products through LRS. What matters is whether international investing fits your goals and how much of your portfolio you should allocate to it.”

Also Read: Detailed guide to GIFT City investments for NRIs.

How does LRS work for GIFT City investments?

LRS is the RBI framework that allows resident individuals to remit money abroad for permitted purposes, subject to an annual limit. Remittances to GIFT City under the scheme are treated as overseas remittances, even though GIFT City itself is located in India.

In July 2024, the RBI widened the framework to allow authorised persons to facilitate LRS remittances to IFSCs for all permitted purposes. Residents can also open foreign currency accounts with eligible banks in GIFT City.

GIFT City investment options for resident Indians

Resident Indians now have several ways to invest through GIFT City. The right option depends on how much you want to invest, your familiarity with global markets and your financial goals.

Minimum investments and eligibility conditions vary by product and can change. Always check the latest scheme documents before investing.

GIFT City mutual funds

For most first-time investors, GIFT City mutual funds are a practical starting point. They work broadly like mutual funds in India, but investments are generally denominated in US dollars.

Available options include global equity funds and fund of funds that invest in overseas funds tracking indices such as the S&P 500 and Nasdaq 100. If you want to understand how these funds track a market index, our guide explains what index funds are and how they work.

The minimum investment has also become more accessible. PPFAS GIFT reduced the minimum investment in its S&P 500 and Nasdaq 100 fund of funds from USD 5,000 to USD 500, effective 25 August 2026. The change makes these schemes accessible to investors who do not want to commit a large amount at the start. 

At Zenith Finserve, we also reviewed newer launches, including the HDFC International Developed Markets Equity Fund NFO.

Also read: How to Invest in GIFT City Mutual Funds: A Complete Guide

US stocks and ETFs

You can invest in shares of companies such as Apple and Microsoft through eligible IFSC-registered brokers. Some platforms also offer fractional investing, allowing you to buy a portion of a share instead of paying for a whole share.

Access to global stocks through GIFT City is expanding. Zerodha, Groww, Angel One and Upstox received IFSCA approval in June 2026 to offer US and global stock investments through GIFT City.

However, approval does not automatically mean the service is available to every investor. Check whether your preferred broker has launched the service and accepts resident Indians before making plans.

Dollar bonds

Dollar bonds pay interest in US dollars and may suit investors who want a source of foreign-currency income. However, the interest payments do not make them risk-free.

Bond prices can fall when interest rates rise. This is known as interest rate risk, and it can affect the value of your investment if you sell before maturity.

How to invest in GIFT City? A step-by-step process

The process is straightforward once you have decided what you want to invest in.

1. Decide what to buy. Choose between a mutual fund, stock, ETF or bond based on your goals and risk tolerance.
2. Select an IFSC-registered fund house or broker. Confirm that its GIFT City entity accepts resident Indian investors for your chosen product.
3. Open an IFSC account. Even if you already invest with the same company in India, its GIFT City entity may require a separate account.
4. Complete KYC. Submit the required identity and address documents and complete FATCA/CRS declarations covering your tax residency.
5. Transfer money through LRS. Your bank converts rupees into dollars and remits the money to the account specified by your fund house or broker. Complete Form A2 and confirm the purpose code with your bank.
6. Pay TCS, if applicable. If your eligible LRS remittances exceed ₹10 lakh during the financial year, TCS may apply to the amount above that threshold.
7. Make your investment. Once the money reaches your account, purchase the selected fund units, stocks, ETFs or bonds.
8. Keep records and report your investments. Save account statements, transaction records and TCS certificates for tax filing.

Documents you’ll need

• PAN card, which is mandatory.
• Aadhaar or passport, as accepted for identity and address verification.
• Bank account details for the LRS transfer.
• FATCA/CRS self-declaration and other KYC documents required by the platform.

If you’re new to KYC, our KYC explainer covers the basics.

What does it cost? TCS, Forex and other charges

The fund’s management fee is only one part of the cost. You also need to account for TCS, currency conversion and platform charges.

1. TCS (Tax Collected at Source). For eligible LRS investment remittances, banks generally collect TCS at 20% on the amount exceeding ₹10 lakh in a financial year.

This is not an additional tax on your investment. It is a tax credit that you can adjust against your final income tax liability or claim as a refund, depending on your overall tax position.

Example: Consider Meera, a 41-year-old doctor in Bengaluru, who remits ₹15 lakh for investments through LRS during a financial year. Assuming the entire amount is subject to the investment remittance rate, TCS applies to the ₹5 lakh exceeding the threshold. Her bank collects ₹1 lakh as TCS. She can claim the applicable credit when filing her income tax return, but the amount remains unavailable to her until she can use the credit or receive a refund.

2. Currency conversion. Your bank charges a margin when converting rupees into US dollars. The actual rate varies by bank, transaction size and service. The Economic Times has reported currency conversion costs of around 0.5% to 1%, though you should check the rate offered for your own transaction.
3. Platform and trading charges. Account fees, transaction charges and other platform costs vary across providers. These can be higher than what you are used to paying for domestic investments, so compare the full cost before opening an account.

Anuj says: “I ask clients to consider TCS before deciding how much to remit. If you transfer a large amount at once, part of your money can remain tied up until you use the tax credit or receive a refund. Planning remittances across financial years, while accounting for other overseas expenses, can help manage cash flow.”

How GIFT City investments are taxed for residents?

GIFT City is not automatically tax-free for resident Indians. Many of the tax exemptions associated with GIFT City apply to eligible non-residents, not resident investors. 

As an Indian tax resident, you generally need to account for your global income under Indian tax rules. The exact treatment depends on the investment structure and the type of income you earn.

US stocks and ETFs held directly. For directly held foreign shares and ETFs, the tax treatment generally follows the rules applicable to foreign capital assets.

• Held for more than 24 months: Gains are generally treated as long-term capital gains and taxed at 12.5%, without indexation, under the applicable rules.
• Held for 24 months or less: Gains are generally short-term and added to your income, with tax charged at your applicable slab rate.
• Dividends: Generally taxable at your slab rate. If foreign tax has been deducted, you may be eligible to claim relief under the applicable double taxation rules, subject to the required documentation and filings, including Form 67 where applicable.

For more on long-term gains, see our LTCG explainer, and for how slab rates work, our guide to income tax.

GIFT City funds set up as trusts. Some GIFT City funds, including PPFAS GIFT outbound funds, follow a trust structure under which tax is paid at the fund level. According to the scheme’s taxability note, investors are generally not taxed again on gains that the scheme has already paid tax on, and redemption proceeds are paid after applicable taxes.

The precise treatment depends on the fund’s legal structure and tax documentation. Do not assume that every GIFT City fund follows the same approach. Read the specific scheme’s tax note before investing.

No STT. Trades on GIFT City exchanges do not attract Securities Transaction Tax (STT), the tax levied on eligible securities transactions in India’s domestic market. However, the absence of STT does not mean that capital gains or other applicable taxes disappear.

India’s new Income-tax Act, 2025, came into force on 1 April 2026. Since tax treatment can depend on the instrument and its structure, consult a chartered accountant before investing a substantial amount.

Do you need to report GIFT City investments in your ITR?

In many cases, reporting is necessary, and it is important to establish the correct disclosure requirements for your investment.

Resident Indians holding foreign assets may need to disclose them in Schedule FA, the foreign assets section of the income tax return. The requirement is clear for directly held foreign stocks and ETFs. The treatment of certain GIFT City fund holdings can be less straightforward, depending on their legal structure and the applicable reporting rules. The PPFAS GIFT taxation note also encourages investors to consider voluntary disclosure where appropriate.

For practical purposes:

• Choose the correct ITR form. ITR-2 may apply if you have no business or professional income, while ITR-3 may be required if you have such income. ITR-1 does not provide Schedule FA.
• Check the reporting period. Schedule FA generally uses the relevant calendar-year reporting period rather than only the financial year.
• Maintain records. Keep account statements, contract notes, remittance records and TCS certificates.

GIFT City vs Domestic International Funds vs Foreign Broker

These three routes provide access to global markets, but they differ in how you invest and manage your money.

If a domestic international mutual fund you want to invest in is still accepting fresh money, it may remain the simplest option. GIFT City becomes more relevant when domestic funds are unavailable or when you specifically want to invest and hold assets in dollars.

Risks to know before you invest

Before investing, understand the risks that come with holding overseas assets.

• Currency risk: Your investment is denominated in dollars. If the rupee strengthens against the dollar, your returns in rupee terms may fall even if the investment performs well in dollars.
• Changing regulations: GIFT City’s investment framework is evolving. Product availability, minimum investments and tax treatment can change.
• No DICGC cover on IFSC bank deposits: Dollar deposits with banks in GIFT City are generally not covered by DICGC insurance, which protects eligible domestic bank deposits up to ₹5 lakh. Avoid leaving large amounts idle in such accounts.
• Liquidity risk: AIFs and some bonds may be difficult to sell quickly. Check lock-in periods, redemption conditions and the availability of buyers before investing.

Is GIFT City right for you?

GIFT City may suit you if:

• You already have an emergency fund, adequate health and term insurance, and regular SIPs in Indian mutual funds.
• You are saving for a goal linked to a foreign currency, such as your child’s overseas education or retirement travel abroad.
• You want to diversify part of your portfolio beyond Indian markets.

Consider Ravi and Priya, a couple in their mid-40s living in Ahmedabad. Their daughter may study abroad in eight years.

Investing part of their education savings in a suitable global equity fund through GIFT City could help them build some of the money in dollars, matching the currency of their future expenses.

However, they would still need to account for market risk and the time available before the goal.

GIFT City may not be the right choice yet if you are still building your financial foundation or expect to need the money within the next two or three years.

Anuj says, “Global investing should complement your Indian portfolio, not replace it. I generally ask clients to first secure their emergency fund, insurance and regular investments in Indian funds. Once these basics are in place, GIFT City can be one way to diversify internationally. The allocation should depend on your goals, time horizon and ability to handle risk.”

Not sure how much of your portfolio should go global? A short review of your goals can show you where GIFT City fits, if at all.

How can Zenith Finserve help you?

At Zenith Finserve, we help you understand:

• How much of your portfolio, if any, should be invested overseas.
• Whether a GIFT City fund, a domestic international fund or another investment route suits your needs?
• How to plan LRS remittances and account for TCS?
• How to approach the tax reporting requirements for your global investments?

You can learn more about our approach.

Book a conversation with our team to understand whether GIFT City fits your financial plan.

Conclusion

Resident Indians can invest in GIFT City through LRS, and the process is more straightforward than many people expect. You generally need a PAN, an account with an eligible IFSC institution and a bank remittance under LRS. Some mutual fund options now accept investments starting at USD 500.

However, access alone is not a reason to invest. Plan for TCS and currency conversion costs, understand the tax and reporting requirements, and decide how much global exposure your financial goals actually need.

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