Every new GCC in India makes two separate decisions: which city, and which regulatory scheme. The scheme choice is the one most often made by default rather than on purpose, and it's the one with the bigger financial and operational consequences.
SEZ: real tax relief, real constraints
A unit inside a Special Economic Zone gets a genuine income-tax benefit under Section 10AA of the Income Tax Act: 100% exemption on export profits for the first 5 years, 50% for the next 5, and a further conditional 50% for 5 years after that, plus duty exemptions on imports for the unit. SEZs are still governed today by the SEZ Act, 2005; a proposed replacement (the Development of Enterprise and Service Hubs Bill) has been under discussion since 2022 but has not been enacted. The trade-off for the SEZ tax benefit is an export obligation and a dedicated-campus requirement that sits uneasily with hybrid or remote-friendly operating models.
STPI: facilitation, not a tax holiday
This is the most common misunderstanding we see. STPI (Software Technology Parks of India) today functions as a customs and procedural facilitation scheme: duty-free import of IT hardware, single-window administrative support, simplified compliance. It is not an income-tax holiday. The STPI income-tax exemption that existed under Sections 10A/10B of the Income Tax Act lapsed for new units after FY 2010-11. Treat STPI as operational convenience, and price your tax position accordingly.
Non-STPI (DTA): the flexibility default
Operating in the Domestic Tariff Area, outside both SEZ and STPI, gives up both of the above in exchange for the fewest constraints: no minimum export ratio, no campus restriction, and the easiest structure to resize or relocate as the GCC's mandate evolves. For a GCC running a hybrid model, or whose work mix spans export and India-facing activity, this is usually where it lands.
How we help clients decide
The right answer depends on how firmly your operating model is fixed at the point of setup, not on which scheme sounds most favourable in isolation. We walk through this alongside the entity and location decisions, not after them, since unwinding a scheme choice later is materially harder than making it correctly once. The full six-step setup journey, including this decision in context, is on our GCC in India hub.
This article is general information, not tax or legal advice for your situation. Speak with a qualified adviser before acting.