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Abstract: 

In May 2016, India and Mauritius signed a protocol to amend their existing tax treaty. Most significantly, the protocol will close off what was commonly known as the “Mauritius route” for investment into India, by allowing source-state taxation of capital gains from the sale of shares. This, effectively, will give India the right to impose tax on gains derived by a Mauritius company from the sale of shares in an Indian company, closing off a strategy used by many investors to avoid paying any tax on such gains. Fortunately, because of provisions for (1) prospective applicability of new provisions and (2) grandfathering of past investments, investors in India can still operate with certainty. Copyright © 2016 Deloitte Development

Keywords: India-Mauritius tax treaty, Protocol to India-Mauritius tax treaty, source-state taxation of capital gains, Azadi Bachao Andolan case, exchange of information

Affiliations:  1: Deloitte Haskins & Sells LLP; 2: Deloitte Haskins & Sells LLP; 3: Deloitte Haskins & Sells LLP; 5: Deloitte Tax LLP.