INDIA IN TALKS TO TWEAK TAX TREATY WITH MAURITIUS

India has initiated discussions with Mauritius to tweak the provisions of their tax treaty. More than 43% of foreign investment inflows into India are routed through the island nation to take advantage of the tax benefits provided in the treaty. Finance Ministry may attempt to restrict such benefits.
Restrictions could be on the lines of the India-Singapore double tax avoidance agreement (DTAA), wherein the benefits of the treaty are linked to certain conditions to ensure that only genuine investors gain from it. Such a condition is called limitation of benefit clause.