India to Revise Double Tax Avoidance Agreements

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Aug. 12 – India will soon revise its  double tax avoidance agreement (DTAA) with other countries with anti-abuse rules for agreements made before 2004, reports The Economic Times.

Treaties made after 2004 already have anti-abuse rules in place that limit tax benefit provisions. For its treaty with Mauritius made after 2004, a joint working group was established in 2006 to develop safeguards for preventing abuse.

According to India’s Income Tax Department: The object of such agreements is to evolve an equitable basis for the allocation of the right to tax different types of income between the ‘source’ and ‘residence’ states ensuring in that process tax neutrality in transactions between residents and non-residents.

India has signed DTAA with 76 countries. The tax treaties with Netherland, Australia, Cyprus and the US were signed before 2004 while that with Singapore was signed after 2004.

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