Singapore: Possible amendment to tax treaty with India, capital gains

Singapore: Possible amendment to tax treaty with India

The investment community in Singapore is monitoring the status of developments relating to the India-Cyprus income tax treaty—and specifically amendments that would shift from a resident-based taxation to a source-based taxation with respect to capital gains. Under a provisional agreement, there would be a grandfather clause for investments made prior to 1 April 2017.

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The provisional agreement is pending approval in India, after which a new tax treaty could be signed by India and Cyprus. 

The proposed changes in relation to the capital gains article under the treaty is similar to recent changes made to the India-Mauritius income tax treaty (May 2016). Still, it remains to be seen whether the final amended agreement would limit India’s authority to tax capital gains to “shares” only or whether it would extend to other instruments. 

According to press releases from senior government officials in India, the provisions—specifically the articles concerning capital gains—of India’s tax treaties with the Netherlands and with Singapore are slated to be amended next. 


Read a July 2016 report [PDF 352 KB] prepared by the KPMG member firm in Singapore: Proposal to amend the India-Cyprus tax treaty

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