As a copy editor with experience in SEO, I understand the importance of providing valuable and informative content to readers. In this article, we will discuss the Double Taxation Avoidance Agreement (DTAA) between India and Mauritius in PDF form.

What is Double Taxation Avoidance Agreement?

Double Taxation Avoidance Agreement is a treaty signed between two countries to prevent double taxation of income earned in one country by a resident of the other country. DTAA ensures that taxpayers do not pay taxes twice on the same income to both the countries. DTAA is beneficial to companies and individuals who have investments or conduct business in two or more countries.

DTAA between India and Mauritius:

India and Mauritius signed a DTAA in 1983 to avoid double taxation of income. The agreement was aimed at encouraging investment and promoting trade between the two countries. According to the agreement, capital gains tax on the sale of shares by a Mauritius resident in an Indian company would be exempted from tax in India. This provision made Mauritius an attractive destination for foreign investors to route their investment into India.

The tax exemption on capital gains was a significant factor in the growth of foreign investments from Mauritius into India. The beneficial provisions of the DTAA led to a large influx of investments through Mauritius into India. This created a need to revisit the agreement and make necessary amendments to prevent misuse and abuse of the treaty.

Revised DTAA between India and Mauritius:

India and Mauritius signed a revised DTAA in 2016 to plug the loopholes and curb abusive practices. The new agreement amended the tax exemption on capital gains by Mauritius residents on the sale of shares in an Indian company. The revised DTAA restricted the exemption to shares acquired on or after April 1, 2017.

The revised DTAA also introduced a Limitation of Benefits (LOB) clause to prevent treaty shopping. The LOB clause ensures that only genuine investors benefit from the treaty. This clause specifies that entities that do not have a substantial business presence in Mauritius will not be eligible for the tax benefits under the treaty.

PDF format of DTAA:

The DTAA between India and Mauritius is available in PDF format on the websites of the Ministry of Finance and the Income Tax Department. The PDF version of the agreement provides easy access to the text of the treaty and its provisions.

Conclusion:

The Double Taxation Avoidance Agreement between India and Mauritius in PDF format is a useful resource for investors and taxpayers. The agreement provides clarity on the tax provisions and benefits available to taxpayers. The revised DTAA ensures that the treaty is not misused and provides a level playing field for genuine investors. The availability of the PDF version of the agreement on the ministry and department websites makes it easily accessible to everyone. So, if you are a taxpayer or an investor, refer to the DTAA to understand the tax implications of your investments in India and Mauritius.