India: Tax Treaties

A person living outside India gifts shares of a US company to a family member or associate resident in India. No price is paid, no money leaves India, and there may be no commercial deal between them. It looks like a simple private transfer.

The intricacies of cross-border transactions could overwhelm, as the process has to be planned from the perspective of transfer pricing and double taxation. Imagine a business group operating with two associated group companies-one each operating Overseas and in India. While the overseas firm searches prospects, finalizes clients, and secures orders, the Indian arm offers software, technical, and operational support. Despite running separate operations, both companies are owned by the same promoters who own and run both businesses. From a business standpoint, this setup works quite well.

An engineering, procurement and construction contract in India is taxed on the strength of decisions taken before the award: how the scope is divided, which entity signs, where title to equipment passes, and what the employer is told to withhold.

Explore key Indian tax rulings on FDI policy amendments for land-border countries, share buyback taxation under section 56(2)(x), tenancy rights in property redevelopment, and transfer pricing safe harbour rules. Discover how recent tribunal decisions impact corporate restructuring, foreign exchange compliance, and depreciation on goodwill from intra-group amalgamations.

The Double Taxation Avoidance Agreement ("DTAA") between the Republic of India and the Republic of Singapore (officially, the Agreement for Avoidance of Double Taxation and Prevention...

India's Supreme Court ruling in Tiger Global sent shockwaves through foreign investors who structured their investments through Mauritius and similar treaty jurisdictions. Following diplomatic intervention at the highest levels, the Indian government introduced targeted amendments to its tax rules—but do these changes fully restore investor confidence, or do critical uncertainties remain?

The ruling excludes vacation and business development days from service PE calculations and confirms virtual services from abroad don't count, potentially reshaping compliance for multinationals...

Dividend taxation in India has historically been one of the shifting and contested areas of direct taxation punctuated by doctrinal uncertainties, conflicting tribunal and court decisions and eventual legislative reforms.

This playbook offers a practical framework for mid-sized global groups entering India, covering capital structuring, treaty outcomes, PE defence, cross-border payments, GST treatment, and TP governance.