India, Mauritius tax law amendment under govt scanner

India, Mauritius tax law amendment under govt scanner

Impact over P-notes is a cause of concern

India, Mauritius tax law amendment under govt scanner

The government on Monday constituted a working group to examine concerns arising out of amendments to India-Mauritius Double Taxation Avoidance Agreement (DTAA) and related issues.

The committee to be headed by Joint Secretary of the direct tax department is expected to give a report to the government in three months.

Among other things, concerns have been raised on impact over P-notes where the names of participants are kept anonymous. Investments made from Singapore have also caused concerns.

The India-Singapore tax treaty provides that the capital gains exemption in India will be available only till such time the India-Mauritius treaty provides for the benefit.

India and Mauritius had signed an amendment to their 33-year-old tax treaty that gave India the right to tax capital gains on investments from that country.

But the India-Singapore tax treaty provides that the capital gains exemption in India will be available only till such time that the India-Mauritius treaty provides for the benefit. Hence, the amendment to Singapore became a natural corollary to changes in India-Mauritius tax law.

“With a view to examine the consequential issues arising out of amendments to India-Mauritius Double Taxation Avoidance Convention and related issues, a Working Group headed by Joint Secretary (FT&TR-II), CBDT and comprising departmental officers and representatives of SEBI, custodians, brokerage firms and fund managers has been constituted,” an official statement said.

Mauritius and Singapore together account for 50% of the total FDI investment India receives. Additionally, Mauritius also accounts for 20% FPI (foreign portfolio investment) in India.

DH Newsletter Privacy Policy Get top news in your inbox daily
GET IT
Comments (+)