Protocol For Amendment Of Indo-Mauritius Double Taxation Avoidance Treaty

Mauritius, with regard to India, has been considered as one of the most favourable tax benefit countries. The favourable provisions of the "Agreement for avoidance of double taxation and prevention of fiscal evasion with Mauritius" (the "Mauritius Treaty") entered into by the Indian Government in the year 1993 has essentially led to a substantial amount of foreign investments in India through Mauritius. According to Clause 4 of Article 13 (Capital Gains) of the existing Mauritius Treaty, any capital gains derived by a resident of Mauritius from the alienation, sale, exchange, transfer or relinquishment of property in India shall be subject to capital gains tax only in Mauritius, thereby mitigating capital gains tax payable in India. Considering the minimal tax rates in Mauritius, the alienation of such shares will be subject to minimal capital gains tax, making Mauritius a sweet spot for investors all around the world for routing investments to India.