India and Mauritius have bolstered the Double Taxation Avoidance Agreement (DTAA) by implementing stricter measures to prevent investors from evading taxation on funds entering India.
The amendment, signed on March 7, introduces a Principal Purpose Test (PPT) to assess whether foreign investors genuinely qualify for treaty benefits or if they seek tax advantages by routing investments through Mauritius.
DTAA serves as a bilateral pact aimed at preventing double taxation of income earned in one country by residents of the other.