India empowers tax authorities to deny treaty benefits on Mauritius-routed investments under Principal Purpose Test

Exam-focused facts from the 15 October 2026 current affairs briefing.

Key facts

India's finance ministry notified amendments to the India-Mauritius Double Taxation Avoidance Agreement (DTAA) introducing a Principal Purpose Test (PPT), allowing denial of treaty benefits if obtaining tax relief was one of the principal purposes of a transaction.
The protocol, signed in March 2024, came into force on August 10, 2026.
Mauritius accounts for approximately $185.21 billion, or about 23.82%, of India's cumulative FDI equity inflows from April 2000 through December 2025, per DPIIT data.
Relief may still be available if granting it is consistent with the object and purpose of the relevant treaty provisions.