Open interpretive questions

Tax

1. How does section 147 interact with minimum tax in particular structures? Section 147 removes qualifying income from total income, but section 206 may still impose minimum alternate tax on book profit (companies) or alternate minimum tax (other persons). The 9 per cent rate applies only to a unit 'deriving its income solely in convertible foreign exchange'. Open points include whether a single rupee receipt takes a unit outside the 9 per cent rate, and whether a non-corporate unit in the section 202 regime, which keeps the section 147 deduction under section 202(5), is outside alternate minimum tax under section 206(2)(d). See minimum alternate tax.
2. What is the scope of 'approved business activities' for a multi-activity unit? Section 147(3)(c) confines the deduction to income from approved business activities. A unit may hold more than one IFSCA registration, or carry on activities ancillary to its registration. The Act does not define 'approved', and we have not seen CBDT guidance. On one side, income must trace to a permitted activity; IFSCA has directed an entity not to claim tax benefits on services outside its permitted client categories. On the other, ancillary income may be argued to be part of the approved business.
3. How are rupee legs in mixed transactions treated? Section 20 of the IFSCA Act requires financial services in an IFSC to be transacted in foreign currency as specified by regulations. Form No. 35 deducts income not received in convertible foreign exchange. Where a transaction has a rupee component (for example fees or expenses in India, or settlement with a domestic counterparty permitted by regulation), it is not settled whether, and how far, the rupee element affects eligible income or the minimum tax rate.
4. From when do existing units count the 20-out-of-25 years? Section 147(2) applies 'irrespective of anything contained in section 80LA' and counts from the 'relevant tax year' of the original permission. One reading gives existing units the longer period counted from their original registration. We have not seen a CBDT circular confirming it. See from the 1961 Act to the 2025 Act.
5. What counts as 'splitting up' or 'reconstruction' under section 147(5)? For units commencing on or after 1 April 2026 the deduction is lost if the unit is formed by splitting up or reconstructing an existing Indian business. The enacted text contains no exceptions. How far moving clients, staff or contracts from an Indian group company to a new IFSC unit engages the test is open.

Regulatory

1. What is the appeal route from orders outside the SEBI Act and the Insurance Act? The IFSCA Act has no general appeal provision; section 13(4) imports the appeal provisions of the parent Acts. IFSCA's orders against lessors and finance units under regulation 11 of the Finance Company Regulations and section 12 of the IFSCA Act do not state an appeal route. Whether an appeal lies, to whom, and whether the writ jurisdiction is the only route, is not settled in the published material.
2. Is settlement available? Section 13(4)(b) of the IFSCA Act applies the parent Acts' provisions on 'settlement of civil and administrative proceedings, compounding' to IFSC entities. No IFSCA order we have read records a settlement, and we have not found IFSCA settlement regulations. Whether a parent Act's settlement scheme can be used in the IFSC without them is open.
3. Which SEBI circulars still apply in the IFSC? Section 34 of the IFSCA Act keeps earlier rules, regulations and notifications under the Central Acts in force so far as consistent, until superseded. IFSCA's algorithmic trading guidelines expressly supersede SEBI's algorithmic trading circulars 'applicable in IFSC', and a 2026 order relied in part on SEBI's 2011 outsourcing circular. How far other SEBI circulars continue to bind IFSC entities, where IFSCA has not replaced them, is not settled.
4. When do the cyber security exemptions end? The amending circular of 10 March 2026 exempts some entities for three years 'from the date of its issuance'. It is unclear whether this runs from 10 March 2025 (the original circular) or from 10 March 2026. See cyber security.

Data protection

1. How does section 17(1)(d) of the DPDP Act apply to IFSC units? It exempts much of the Act where personal data of individuals not within India is processed under a contract with a person outside India by a person based in India. Open points for IFSC units include whether a branch of a foreign entity is 'based in India' for this purpose, whether data received through a foreign parent rather than directly from the foreign client is processed 'pursuant to' such a contract, and how a mixed client book is treated. See data protection.

How we use this list

The list records questions, not answers. Where an official clarification, circular or decision resolves a question, we will move it to the relevant guide and note the change. If a question affects a structure you are planning, it should be addressed in the structure, the documents and, where available, through IFSCA's informal guidance scheme or an advance ruling on the tax side. See informal guidance and tax disputes.