NEW DELHI: The government today told the Lok Sabha that it has started negotiations with some countries to amend provisions on capital gains taxation as far as Double Taxation Avoidance Agreements (DTAAs) are concerned.
Some of the DTAAs entered into by India with other countries allow taxation of capital gains on shares only in the country of which the taxpayer is a resident.
“The government is aware that some of the investments coming from such countries may be influenced by this provision,” Minister of State for Finance Jayant Sinha said in a written reply in the Lok Sabha.
“The government has already initiated the process of negotiations with such countries for amending the provisions on capital gains taxation in DTAAs.”
Two members of the House asked the government whether it’s aware of foreign investors routing funds through countries having DTAAs with India to avail tax exemption.
Sinha said quantification of tax revenue loss as a result of avoidance and tax planning by companies is not undertaken as the data required for such an exercise are not readily available.(AGENCIES)
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