Mauritius Tax Treaty

Assessee appealed it was denied benefit of treaty on capital gains from share transfer

IVCA had said the move to treat all income from Indian AIFs as dividends would wreak havoc on funds with a presence in Mauritius and investments in India

The move to tax capital gains from India would fundamentally alter the character of all income arising from Indian AIFs and lead to increased litigation

Experts say while the backlog of cases will most likely be reduced, the quality of rulings may not inspire taxpayers

In May, India and Mauritius signed a protocol to introduce in-principle taxation of capital gains in India in a phased manner

A foreign company in India will be taxable if its employees spent 90 days in India in the past 12 months

Deliberate on their concerns over taxation against the backdrop of India signing revised tax treaty with Mauritius this week

The government should clarify as soon as possible so that investors get time to realign their strategy

P-notes will get impacted but no sweat for markets

Fund-raising could become tough after capital gains tax kicks in from April 2017

The treaty between India and Mauritius was inked in 1983, but assumed significance a decade later, when foreign institutional investors were allowed to invest in Indian shares

According to analysts, India will next year toughen the criteria under which offshore funds can claim tax benefits abroad

General anti-avoidance rule applies in case of any situation where there is an abuse of treaty for gaining tax benefit unduly

Analysts say this treaty shouldn't upset the Indian equity markets in the short-to-medium term