With the revision to the India-Mauritius tax treaty to phase out capital gains tax exemption, it was only a matter of time before the Government turned its attention to the India- Singapore tax treaty. On 30th December 2016, India and Singapore signed a Third Protocol to amend their bilateral tax treaty.
Two changes which stand out are:
- Source-based taxation of capital gains arising from alienation of shares acquired from 1st April, 2017
- Enabling provision under the treaty to apply anti-avoidance provisions in the domestic law
The new Protocol introduces a new Article 28A ‘Miscellaneous” to provide that India- Singapore tax treaty shall not prevent a Contracting State from applying its domestic law and measures concerning the prevention of tax avoidance or tax evasion.
Our newsflash covers the key changes in new Protocol to amend the India-Singapore tax treaty.