Several FPIs have received queries from the tax department seeking additional details related to ‘commercial substance’ and control residing in Mauritius. A large number of Mauritius FPIs have also been subjected to ‘scrutiny assessment’, a detailed assessment by the tax department to ensure the taxpayer has not understated income or underpaid tax.
In some cases, the tax department has declined treaty benefits to some Mauritius funds that could not fulfil the substance requirements, the people cited above said. Derivative market gains made by FPIs from Mauritius and Singapore are exempt from taxes in India as per India’s double taxation avoidance agreements (DTAAs) with the two countries.
Hence, if any Mauritius fund dealing in Indian derivatives is declined treaty benefit, the fund would have to shell out tax at a rate of over 30% on derivative market gains.
An email sent to the finance ministry remained unanswered till press time.
Bu hikaye Mint Mumbai dergisinin July 12, 2023 sayısından alınmıştır.
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Bu hikaye Mint Mumbai dergisinin July 12, 2023 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
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