What happened?
India’s Ministry of Finance notified the India–Mauritius treaty protocol on 13 October 2026 through Notification 135/2026, S.O. 5611(E). The notification confirms entry into force on 10 August 2026; the protocol was signed on 7 March 2024.
Key details
The protocol replaces the treaty preamble and introduces Article 27B, commonly described as a principal-purpose test (PPT). Relief must be refused if it is reasonable to conclude, from all relevant facts and circumstances, that obtaining it was one principal purpose of an arrangement or transaction, unless granting it is established to accord with the relevant treaty provisions’ object and purpose.
Who is affected?
The review is relevant to entities claiming India–Mauritius treaty benefits, including Mauritian investment structures with GCC investors. A GCC investor’s involvement alone neither establishes eligibility nor triggers denial.
Effective date / timing
The notification date is 13 October 2026; the protocol’s entry into force is 10 August 2026. Article 3(2) gives the provisions effect from entry into force irrespective of when taxes are levied or the taxable years concerned. Application to a particular income item or earlier arrangement requires specific analysis.
Why it matters
T&M analysis: an investment’s age does not, by itself, settle the PPT question. Equally, this protocol should not be presented as automatically taxing every historic investment or cancelling every treaty benefit. It introduces an anti-abuse assessment rather than a blanket new tax.