SBI Seeks Extension of Tax Benefits for GIFT City operations

State Bank of India, the country’s largest lender, has approached the Centre seeking an extension of the 10-year corporate tax exemption available to its unit in GIFT City, as per the news reports. 

The incentive expires next year and would require the bank to begin paying corporate tax at domestic rates unless extended. SBI was among the earliest institutions to set up operations in the International Financial Services Centre. 

Why SBI Wants an Extension? 

SBI’s GIFT City balance sheet has grown sharply in recent years, helped by strong foreign currency borrowing. The bank’s book in the IFSC now stands at about $10 billion. SBI has also invested in constructing a new building within the financial hub.  

According to news reports, the bank believes that without an extension it may need to shift part of its business offshore. Early entrants spent 4 to 5 years in GIFT City with limited business activity, effectively losing several years of the tax holiday period.  

Industry Context 

SBI is not the only bank facing the expiry of benefits. The tax holidays for Bank of Baroda, Yes Bank and several others end in 2027. The government is examining the request and may announce relief in the upcoming Budget. 

Under the present framework, entities in the IFSC can claim a 100% corporate tax exemption for any 10 out of their first 15 years of operation. Most firms activate the exemption once they achieve sufficient scale.  

Read More: GIFT City Funds Hit $26.3 Billion; Investments Cross $13.2 Billion and Investor Base Rises to 4,733! 

SBI Share Price Performance  

As of December 05, 2025, at 12:05 PM, SBI share price is trading at ₹961 per share, reflecting a surge of 1.36% from the previous closing price.  

Conclusion 

With strong momentum in GIFT City and growing foreign currency activity, the debate around extending tax incentives for early entrant banks has intensified. The hub now hosts 35 banks, has crossed 1,000 registered entities and has seen more than 100 billion dollars in foreign currency loans disbursed.  

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