On 10 May, India signed a protocol to amend its double taxation avoidance agreement (DTAA) with Mauritius. The following summarizes the amendments introduced under the protocol:
1. Taxation of capital gains on shares
Under article 13(4) of the India-Mauritius DTAA, capital gains derived by a Mauritius resident from alienation of shares of a company resident in India were subject to tax in Mauritius alone. However, the protocol amends the DTAA to source-based taxation principles. Therefore, capital gains arising on or after 1 April 2017 from alienation of shares of a company resident in India will be subject to tax in India.
However, this change is subject to the following qualifications:
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The business law digest is compiled by Nishith Desai Associates (NDA). NDA is a research-based international law firm with offices in Mumbai, New Delhi, Bangalore, Singapore, Silicon Valley and Munich. It specializes in strategic legal, regulatory and tax advice coupled with industry expertise in an integrated manner.
