India and Cyprus have taken the decision to revise tax treaty

Q.  India and Cyprus have agreed to revise tax treaty under which capital gains tax will be levied on sale of shares of investments made after which financial year?
- Published on 04 Jul 16

a. 2015
b. 2016
c. 2017
d. 2018

ANSWER: 2017
 
India and Cyprus have made the decision to revise the tax treaty under which capital gains tax will be levied on sale of shares on investments made after April 1, 2017.
  • This brings the island nation at par with Mauritius in term of tax treatment on investment
  • New Cyprus Double Taxation Avoidance Agreement has been signed by two countries.
  • It will provide for source based taxation of capital gains on transfer of shares.
  • As per the agreement reached between India and Cyprus on June 29, investments made prior to April 1 2017 will be considered differently
  • Completion of the negotiation on avoidance of double taxation and prevention of fiscal evasion will pave the way for the removal of Cyprus from the list of Notified Jurisdictional Areas retrospectively from November 2013

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