Negative impactEconomy
India-Mauritius tax treaty: Why experts want stronger protection for older investments
CNBC-TV18 1 hr ago·14 Oct 2026, 2:40 pm
India and Mauritius have updated their double‑taxation treaty, adding a Principal Purpose Test (PPT) and tightening the General Anti‑Avoidance Rule (GAAR). The changes mean that transactions whose main aim is to obtain a tax benefit could be challenged, even if they were set up before the treaty was revised in April 2017.
For Indian investors who hold Mauritius‑linked assets—such as offshore funds or structured products created before that date—the new rules could trigger retroactive tax assessments, potentially eroding returns. The uncertainty also affects fund managers who may need to restructure portfolios to avoid disputes.
Experts like Dinesh Kanabar and Porus Kaka are urging the government to amend the Income‑Tax Act to carve out a safeguard for pre‑April‑2017 investments. Investors should monitor parliamentary debates, any official clarification from the tax department, and the timeline for any amendment, as these will shape the risk profile of existing offshore holdings.
Excerpt from CNBC-TV18
Published On Oct 14, 2026 | 20:10 IST Last Updated On Oct 14, 2026 | 20:10 IST India's tax treaty amendment with Mauritius introduces the Principal Purpose Test, raising concerns over whether pre-April 2017 grandfathered investments could face tax challenges. Experts urge legislative clarity to protect foreign…Read the original at CNBC-TV18
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