The government has notified the protocol amending the India-Israel tax treaty to provide for exchange of information on tax matters including bank details with a view to check black money flows.
The government has notified the protocol amending the India-Israel tax treaty to provide for exchange of information on tax matters including bank details with a view to check black money flows.
The amended treaty provides that information received from Israel in respect of an Indian resident can be shared with other law enforcement agencies like the Enforcement Directorate, the Directorate of Revenue Intelligence and CBI with authorisation of Competent Authority.
According a Revenue Department notification, the amended treaty provides for levy of capital gains tax in India on sale of shares or interest in a partnership, trust or other entity if it derives more than 50 per cent of the value directly or indirectly from immovable property situated in the country at the time of the sale of any time during preceding 12 months.
It also provides for 'Limitation of Benefits' Article as an anti-abuse provision, that would enable triggering of domestic law in case of misuse of the treaty.
"Benefits of this Convention shall not be available to a resident of a Contracting State, or with respect to any transaction undertaken by such resident, if the main purpose or one of the main purposes of the creation or existence of such resident or of the transaction undertaken by it, was to obtain benefits under this Convention that would not otherwise be available," it said.
In such cases, domestic law on prevention of tax evasion or tax avoidance will apply.
"Any benefit under this Convention shall not be granted to a person who is not the beneficial owner of the item of income," the notification said.
The existing DTAC between Indian and Israel was signed in 1996. They, in October 2015, signed a protocol amending the double tax avoidance treaty. It came into force on December 19, 2016 after completion of procedures by the two countries.
Now as per provisions of the amended treaty, it will come into force effect in India from fiscal year beginning April 1.
"The government hereby notifies that all the provisions of the said protocol between the Republic of India and the State of Israel for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes of income and on capital... shall be given effect to in the Union of India," the Revenue Department notification said.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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