India Mauritius tax treaty amendment

India-Mauritius Tax Treaty Amendment: All You Need to Know

India and Mauritius shake up tax laws! Find out the latest on the amended treaty here.

India and Mauritius have made headlines with the recent amendment to their tax treaty, aimed at preventing tax evasion and avoidance. The protocol includes a principal purpose test to combat treaty abuse, signaling a significant shift in tax regulations between the two countries. Despite concerns, the amended agreement is expected to not have a retrospective taxation effect, providing clarity and stability for taxpayers and investors.

Although the revised protocol is yet to be ratified and notified under Section 90 of the Income-tax Act, 1961, the Income Tax Department has issued clarifications to address uncertainties. This move reflects the strategic approach towards ensuring transparency and adherence to international tax standards.

Sources reveal that the amended India-Mauritius tax treaty is unlikely to implement retrospective taxation, easing worries among investors. CNBC-TV18 reports that post the agreement signing, taxes will be imposed, offering a more predictable tax environment and fostering economic growth.

Despite global market influences, including the withdrawal of nearly $1 billion by Foreign Portfolio Investors (FPIs), the revised tax treaty between India and Mauritius stands strong. The agreement's focus on combating tax evasion showcases a commitment to fair tax practices and enhancing bilateral relations in the financial domain.

Interesting Fact: The new protocol signifies India's proactive stance in aligning with international tax standards to promote a robust investment climate.

Did you know? The India-Mauritius tax treaty amendment has sparked discussions on how tax changes impact foreign investments and market volatility.