VOI World/ Astha Pandey
India and France are on the verge of finalizing a revised tax treaty, a move that will reshape how dividends and capital gains are taxed between the two nations. This India France revised tax treaty is expected to introduce significant changes aimed at supporting cross-border investments while ensuring clearer taxation rules.
Under the revised treaty, French companies with substantial stakes in Indian firms will benefit from reduced dividend tax rates, encouraging long-term investments. Conversely, India will gain expanded rights to tax capital gains from the sale of Indian shares by French investors, regardless of their shareholding size.
A key highlight of the India France revised tax treaty is the removal of the Most Favoured Nation clause, which had caused legal disputes in the past. By eliminating this clause, both nations aim to reduce ambiguity and provide investors with more certainty.
This revised treaty, once fully ratified, is anticipated to decrease tax disputes and ensure that income generated from Indian markets is taxed more predictably. For India, the agreement represents a strategic balance: attracting foreign investment while safeguarding
