The protocol amending the India-Maurice Agreement, signed on 10 May 2016, provides for a capital gains tax at the source of the shares acquired in a company established in India from 1 April 2017. At the same time, investments made before April 1, 2017 have not been classified as capital gains tax in India. If these capital gains occur during the transitional period from April 1, 2017 to March 31, 2019, the tax rate is capped at 50% of India`s internal tax rate. However, the benefit of a 50% reduction in the tax rate during the transitional period is subject to the reserve requirement. Taxation in India at the full national rate is applied from the 2019/20 fiscal year. If Australian taxpayers have foreign income, the DBA must be controlled for the country where foreign income is collected. The DBA will determine whether foreign income is taxable in Australia, taxable only abroad or taxable in both countries (subject to the possibility that foreign tax offsets may be available to avoid double taxation). The revised Convention on the Prevention of Double Taxation between India and Cyprus, signed on 18 November 2016, provides for a tax on capital gains from the disposal of shares instead of a home-related tax under the Convention on the Prevention of Double Taxation, signed in 1994. However, a grandfather clause is provided for investments made before April 1, 2017 and for which capital gains continue to be taxed in the country where the taxpayer is based.
It also provides assistance between the two countries for the collection of taxes and updates the provisions on the exchange of information to recognized international standards. The concept of “double taxation” can also refer twice to the taxation of certain income or activities. For example, corporate profits can be taxed first, when they are generated by corporation tax (corporate tax) and again when profits are distributed to shareholders in the form of dividends or other distributions (dividend tax). 1. Eliminate double taxation, reduce the tax costs of “global” companies. Example of benefit from the double taxation convention: Suppose interest on NRAs [clarification required] bank deposits draw 30 percent tax deduction at source in India.