In a significant step to plug another loophole on black money, India and Singapore on Friday signed the third protocol for amending Double Taxation Avoidance Agreement (DTAA). In Singapore, Mauritius, Cyprus jurisdictions there was no cap gains, these agreements were misued for round tripping black money. DTAA with Singapore, Mauritius and Cyprus give full exemption on capital gains to investors as there’s no cap gains in contracting countries. Speaking to reporters Finance Minister Arun Jaitley said that the amended DTAA pact with Singapore is similar to the pact with Mauritius. He said that 2016 was significant and historic in terms of DTAA with partner countries. Jaitley said, earlier DTAA beneficiary was not paying capital gains to both countries; which has now been addressed. “On May 10, we amended Mauritius DTAA. Cypress DTAA was amended on November 18. With this reasonable burial was given to routes of black money through DTAA amendments,” he added.
Singapore Deputy Prime Minister Tharman Shanmugaratnam said, “We will have further discussion in coming months on amended DTAA treaty. We have outlined multiple step roadmap for economic relationship between India & Singapore. All concerns of Singapore investors addressed, in coming months we will take talks further with India.”
Jaitley said, “All cap gains liabilities wil be shared between India & Singapore till March 2019. After that entire cap gains will come to India. All investments up to March 31 to be grandfathered till March 2019.”
The Finance Minister further went on to say that all information on investments, money parked in Switzerland from 2018 will be shared. “New agreement with Switzerland to bring in a lot of transparency. From 2019 Swiss officials will give real time info to Indian tax officials,” he said.