India signs revised tax treaty with Mauritius

India and Mauritius has signed the protocol for amendment of a two-decade-old Double Taxation Avoidance Agreement (DTAA) between the two countries. After this India will get taxation rights on capital gains arising from sale of shares acquired on or after 1st April, 2017 in Indian companies. Earlier in 1983, India had signed a DTAA with the Mauritius and now an amendment to DTAC was signed in a bid to ensure that firms in Mauritius that invest in India are not just ‘shell’ companies who could earlier avoid paying capital gains tax in India.

With the signing of this agreement amendment the Double Taxation Avoidance Convention (DTAC) with Mauritius, sale of shares of an Indian resident company will be taxed at 50 per cent of the applicable rate between 1st April 2017, to March 31, 2019. Full capital gains tax will apply from April 1, 2019 onwards. 

As per the Finance Ministry, this Protocol will tackle the long pending issues of treaty abuse and round tripping of funds attributed to the India-Mauritius treaty, curb revenue loss, prevent double non-taxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius.

So now let’s discuss some questions related to this post :
1. Name the country with which India has signed the revised tax treaty ?
2. Earlier in Which year India had signed the Double tax avoidance treaty with the island nation ?
3. Expand the term DTAA and DTAC ?



Courtesy : Business Standard

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