Status as of 1 October 2026
Terms are summarised; the Income-tax Act 2025, the rules and each scheme’s guidelines govern eligibility. Status labels are as printed in the source: OPEN means available or accepting applications; CLOSING means a stated window or period ends on the date shown; CLOSED means no new applicants; ANNOUNCED means announced or approved, check operating guidelines.
Budget 2026-27 cut transfer-pricing friction for IT and captive services
| Scheme | What the investor gets | Who qualifies | Status |
|---|---|---|---|
| IT services safe harbour | A single 15.5% margin on cost for software development, ITeS, KPO and contract R&D, approved through an automated process and available for five years once chosen. | IT services companies with operating revenue up to ₹2,000 crore (threshold raised from ₹300 crore) | RULES NOTIFIED 2026 |
| Fast-track unilateral APA for IT services | Government to fast-track unilateral advance pricing agreements for IT services and endeavour to conclude them within two years. | IT services companies wanting certainty beyond the safe harbour | ANNOUNCED 1 FEB 2026 |
| Tax holiday for foreign cloud services using Indian data centres | Income of a notified foreign company from procuring data-centre services from a specified data centre in India is exempt to the tax year ending 31 March 2047. | Foreign companies serving Indian users only through an Indian reseller, not owning or operating the data centre | ENACTED; TO 31 MAR 2047 |
| Employment Linked Incentive (PM Viksit Bharat Rozgar Yojana) | Employer gets up to ₹3,000 a month for each additional job sustained for at least six months; first-time employees get one month’s EPF wage, up to ₹15,000. | EPFO-registered employers adding jobs between 1 August 2025 and 31 July 2027 | JOBS CREATED TO 31 JUL 2027 |
R&D finance, IFSC tax relief and a national GCC framework are in train
| Scheme | What the investor gets | Who qualifies | Status |
|---|---|---|---|
| Research, Development and Innovation (RDI) Scheme | ₹1 lakh crore corpus giving low or nil interest long-term finance for private-sector R&D, through second-level fund managers. | Companies with R&D and deep-tech projects | Approved Jul 2025; fund launched Nov 2025 |
| IFSC unit deduction (GIFT City) | 100% deduction of eligible income for 20 consecutive years out of 25 (s.147, Income-tax Act 2025). Budget 2026-27 proposed 15% on IFSC business income after the holiday; it is not in the Finance Act 2026. | Units in an IFSC; confirm that the planned activity qualifies | ENACTED; 20 OF 25 YEARS |
| IFSCA Global In-House Centre Regulations, 2025 | Framework for group entities to set up GIC units in GIFT IFSC serving the group’s financial-services operations. | Financial-services groups setting up GIC units | Approved by IFSCA 22 Dec 2025 |
| National framework for GCCs in tier-2 cities | Guidance to states on attracting and supporting GCCs, announced in Union Budget 2025-26. | States; GCCs choosing tier-2 cities | DRAFT STAGE, JAN 2026 |
How the schemes fit a captive
Safe harbour and APA are the core. A captive paid cost plus a margin by its parent can elect the 15.5% safe harbour, which is approved through an automated process and runs for five years once chosen, provided operating revenue is within ₹2,000 crore. A centre above the threshold, or one whose functions do not fit a routine cost-plus profile, can seek a unilateral APA, which the government has said it will fast-track for IT services with the aim of concluding within two years. The mechanics are on the tax and zones page and the transfer pricing guide.
ELI rewards headcount growth. The Employment Linked Incentive pays the employer up to ₹3,000 a month for each additional job sustained for at least six months, with a one-off payment of one month’s EPF wage (up to ₹15,000) to first-time employees. It applies to EPFO-registered employers adding jobs between 1 August 2025 and 31 July 2027, which covers the hiring window of most new centres.
The data-centre holiday is for foreign companies, not Indian subsidiaries. It exempts a notified foreign company’s income from procuring data-centre services from a specified Indian data centre, to the tax year ending 31 March 2047, where the foreign company serves Indian users only through an Indian reseller and does not own or operate the data centre.
RDI is finance, not a grant. The ₹1 lakh crore corpus provides low or nil interest long-term finance for private-sector R&D through second-level fund managers; it suits a centre with R&D or deep-tech projects rather than a routine services captive.
GIFT IFSC is a separate track. A group finance or operations unit in the IFSC can take the 100% deduction for 20 of 25 years under s.147 of the Income-tax Act 2025 and operate under the IFSCA GIC Regulations, 2025. Budget 2026-27 proposed a 15% rate on IFSC business income after the holiday, but that proposal is not in the Finance Act 2026.
The tier-2 framework is not yet operative. The national framework for GCCs in tier-2 cities, announced in Union Budget 2025-26, was at draft stage in January 2026. State policies, not the framework, are what currently pay for tier-2 locations; see state incentives.
Check: Statuses are as of 1 October 2026. The live table at the incentive tracker and the updates feed carry later changes.
What to check next
- Confirm the centre’s projected operating revenue against the ₹2,000 crore safe-harbour threshold and decide whether to elect for five years.
- If functions include higher-value R&D or AI work, compare the safe harbour with a fast-tracked unilateral APA before signing the inter-company agreement.
- Register with EPFO before the first hires so that additional jobs count towards ELI within the window to 31 July 2027.
- For a GIFT IFSC unit, confirm with IFSCA and the tax adviser that the planned activity qualifies for both the GIC Regulations and the s.147 deduction.
- Watch the national tier-2 GCC framework for operating guidelines; it was still a draft in January 2026.