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- India and Singapore sign a protocol amending the agreement for avoidance of double taxation with Singapore.
- India shall have the right to tax capital gains arising from alienation of shares acquired on or after April 01, 2017 by a Singapore resident.
- Investments in shares made before April 01, 2017 have been grandfathered and will continue to enjoy the benefits of the erstwhile provisions of the India-Singapore tax treaty. Capital gains arising from the alienation of such investments will not be subject to capital gains tax in India, subject to a revised Limitation of Benefits clause provided for under the protocol.
- Capital gains arising out of the alienation of instruments other than shares (convertible debentures, bonds etc.) held by Singapore residents should continue to be entitled to benefits of taxation only in Singapore.
- The protocol provides for domestic anti-avoidance measures to override treaty provisions.
By Neha Mishra
