India and Mauritius tax treaty changes:

• India and Mauritius have amended their more than two-decade-old tax treaty in Port Louis.
• India gets the right to tax capital gains arising from the transfer of shares of Indian resident companies.
• The amendment clearly states that all investments made before 1 April 2017 will not be liable to be taxed in India.
• This means that even if investors who have bought shares in Indian companies before 1 April 2017 decided to sell these shares after this date, the capital gains accruing to them will not be taxed in India.
• The protocol gives India the right to tax capital gains on transfer of Indian shares acquired on or after 1 April 2017.
• The amendment to the India Mauritius tax treaty also automatically applies to the India-Singapore tax agreement.
• It will impact private equity and venture capital investors who typically invest in unlisted securities as they will now be liable to pay capital gains tax in India.
• The protocol will tackle the long pending issues of treaty abuse and round tripping of funds, curb revenue loss, prevent double nontaxation, streamline the flow of investment and stimulate the flow of exchange of information between India and Mauritius 
• Many foreign investors will have to redraw their strategies. The incentive to route investments through Mauritius will cease to exist once the new rule kicks-in. This could raise their tax outgo.