Pursuant to the protocol signed between GoI and the Government of Singapore on December 30, 2016 amending the Indo-Singapore Double Taxation Avoidance Agreement (‘Indo-Singapore DTAA’):

i. Capital gains tax exemption available to Singapore residents under the Indo-Singapore DTAA has been withdrawn with respect to shares in Indian resident companies that are acquired on or after April 1, 2017. The withdrawal of exemption is in a phased manner as explained below:

a. Capital gains arising on or after April 1, 2017 till March 31, 2019 (‘Transition Period’): Capital gains arising during the Transition Period will be taxed at 50% of the applicable Indian domestic tax rate, subject to fulfillment of the clause on Limitation of Benefits.

b. Capital gains arising on or after April 1, 2019: Capital gains arising after the Transition Period will be taxed in India as per India’s full domestic tax rate.

ii. Capital gains arising to Singapore tax residents with respect to shares of Indian tax resident companies, which have been acquired up to March 31, 2017, will only be taxable in Singapore even if the gain arises on or after April 1, 2017, subject to fulfillment of ‘limitation of benefits’ clause.

iii. Capital gains arising to Singapore tax residents with respect to securities (other than shares of Indian tax resident companies), e.g. instruments like CCDs and shares of offshore entities, whenever acquired, will continue to be exempt from capital gains tax in India.

It may be further noted that while the Indo-Mauritius Double Taxation Avoidance Agreement (as amended), the withholding tax rate on interest payments made to a Mauritian tax resident will be 7.5% with respect to interest arising on or after April 1, 2017, there is no change on withholding tax rate on interest payments the India-Singapore DTAA, i.e., interest payments to a Singapore tax resident continue to be subject to withholding tax at the rate of 15% in case of loan given by non-banking entities.