Reset & Restart-India's Changing Tax Tides

With the eve of 31 March 2017 marking a cusp of revolutionary change for the Indian tax landscape, the investor community at large braces itself to deal with the consequent changes to investment structures and strategies.

By way of a quick round-up, set out below are few key tax changes that will be / are proposed to be effective from 1 April 2017.

Inbound Investment Structuring

With India's revised tax treaties with Mauritius, Singapore and Cyprus coming into force, capital gains arising on exit of equity investments made on or after 1 April 2017 from these jurisdictions will be subject to taxation in India. However, given (i) the lower withholding tax rate on interest (7.5% under the Mauritius tax treaty), and (ii) residence based taxation of gains from the sale of instruments other than shares, debt investments through these jurisdictions continue to remain attractive.