The clarification follows concerns by tax experts over the agreement opening past investments to scrutiny from tax authorities at the time of exit following the protocol, which was inked on March 7. A key concern expressed by experts is about reopening of past cases in view of the amended provision.
India and Mauritius are unlikely to implement retrospective taxation, sources told CNBC-TV18. The newly signed protocol amending the double taxation avoidance agreement includes a principal purpose test to determine eligibility for treaty benefits.
The sell-off in the stock market was also on account of weak global cues as higher US retail inflation dampened hopes of early rate cuts by the Federal Reserve and rise in the US 10 year yield