Invest in India via Mauritius to save capital gains? Be ready for tougher times ahead!

Taxpayers who claim exemption from tax on capital gains by furnishing a residency certificate of Mauritius should watch out. Now, income-tax (IT) authorities can ask for evidence from Mauritius government to examine the authenticity of a taxpayer who claims exemption on capital gains tax provided under the Indo-Mauritius Double Taxation Avoidance Agreement( DTAA). This is a departure from the practice of furnishing a tax residency certificate from Mauritius for claiming exemption from capital gains tax. According to an Income-Tax Appellate Tribunal (ITAT) Delhi order on March 26, more documents are needed from the Mauritius government to support the claim of the taxpayer that it is a Mauritius resident. The ITAT order was released last week. If the order is not rejected by the high court, it will have a bearing on similar cases reports

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