In an interview with CNBC-TV18's Kritika Saxena, Jayesh H of Juris Corp, JN Gupta, former ED of Sebi and Motilal Oswal, CMD of Motilal Oswal, discussed the development and outlined what it means for the stock market.
With a revised Mauritius pact in place to check round-tripping, Finance Minister Arun Jaitley today said investors must pay taxes on money earned in India and ruled out any depletion of FDI due to imposition of capital gains tax on investments through the island nation.
Finance Minister Arun Jaitley on May 11 said India getting Mauritius to sign a revised tax treaty after a decade long effort was an attempt to curb black money generation and will help minimise round tripping of funds.
The changes in the taxation agreement between India and Mauritius will result in a more stable and transparent tax regime and is "long-term positive" for investors, says a report by Kotak Institutional Equities.
India today signed a tax pact with Mauritius, amending a few clauses in the Double Taxation Avoidance Agreement it had signed with the island nation way back in 1983. A look at the treaty, its genesis, and its benefits, and especially what the new amendments could mean.
This treaty with Mauritius, he said, addresses the concerns with regard to round-tripping of unaccounted wealth into India, says the Economic Affairs Secretary.
Negotiations on India-Mauritius DTAA are to happen on June 29. Vishnu Lutchmeenaraidoo, the Finance Minister of Mauritius said they will submit a new protocol for that, which will have issues related to capital gains with respect to DTAA.
It may not be a case of inadequate disclosure by the promoters and directors; rather it could well be about round tripping of funds and calls for a deeper probe by the tax authorities
Mauritius, often accused of being a route for round-tripping of funds by Indians, today conveyed to Indian government that it was ready to support its Special Investigation Team (SIT) to unearth black money.
Sebi will seek disclosure on the source of funds of the investors who have been allotted shares in preferential issues. Also, the allottees will have to subscribe to the issue using their own funds