In order to promote trade in stock exchanges located in the International Financial Services Centre (IFSC), "I propose to exempt transfer of derivatives and certain securities by non-residents from capital gains tax." The government will establish a unified authority to regulate financial services at IFSCs.The only IFSC in India is the Gujarat International Finance-Tec City, popularly known as GIFT City For foreign portfolio investors and non-resident investors, buying instruments such as Sensex Futures, Nifty Futures , and over 100 single-stock futures, which are available for trade on exchanges operating out of the GIFT City, will be less taxing.The exchanges in GIFT City have said the move could prevent flight of transactions to other offshore centres such as Singapore.These exchanges have been trading debt products such as masala bonds, which would now be exempt from capital gains.The use of the words "certain securities" could be key. V. Balasubramaniam, MD & CEO of India INX, one of the two exchanges at IFSC, said it was "overall a very positive budget" for GIFT City and its constituents.IFSC entities are regulated by the RBI,SEBI, and the IRDA, but a unified and dedicated regulator would mean more clarity in rules of the game and faster clearances of new products.

Source: Economic Times February 01, 2018 13:18 UTC