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What Is Meant By Double Taxation Avoidance Agreement

Under the 2013 Finance Act, a person is not entitled to relief under the Double Taxation Avoidance Agreement unless he or she provides a tax residence certificate to the sender. To obtain a certificate of tax residence, an application must be made to the income tax authorities through Form 10FA (application for a residence certificate within the meaning of an agreement under sections 90 and 90A of the Income Tax Act 1961). As soon as the application has been successfully processed, the certificate is issued in Form 10FB. Cyprus has 45 double taxation agreements and is negotiating with many other countries. Under these agreements, a credit is normally accepted against the tax collected by the country in which the taxpayer is established for taxes collected in the other contracting country, resulting in the taxpayer not paying more than the higher of the two rates. Some contracts provide for an additional tax credit that would otherwise have been due had it not been provided for incentives in the other country, which would have resulted in an exemption or tax reduction. The agreement on the prevention of double taxation between India and Singapore currently provides for a tax based on the residence of the capital gains of a company`s shares. The third protocol amends the agreement effective April 1, 2017, which provides for a tax at the source of capital gains from the transfer of shares of a company. This will reduce revenue losses, avoid double non-taxation and streamline investment flows. In order to ensure the safety of investors, equity investments made before April 1, 2017 were processed in accordance with the benefit limitation clause provided by the 2005 Protocol, in accordance with the terms of the benefit limitation clause.

In addition, a two-year transitional period was provided between April 1, 2017 and March 31, 2019, during which capital gains on shares in the source country are taxed at half the normal rate, subject to compliance with the terms of the benefit limitation clause. What sections of the Income Tax Act reduce the payment of double taxes? Agreements on double tax evasion are divided after India recently amended its Double Taxation Prevention Agreement (DBAA) with Mauritius to fill some gaps.

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