India: Capital losses not reduced by grandfathered exempt capital gains under Mauritius treaty (Tribunal decision)

Capital losses not reduced by capital gains realized before April 1, 2017, and exempt under grandfathering provisions of India-Mauritius income tax treaty

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January 28, 2025

The Mumbai Bench of the Tribunal held that the tax authority could not reduce capital losses incurred by a Mauritius taxpayer by the amount of capital gains realized by the taxpayer in prior years (before April 1, 2017) which were exempt under grandfathered provisions of the India-Mauritius income tax treaty.

The court found that the exempt capital gains could not affect the taxpayer’s capital losses, and thus the taxpayer was able to carry forward the full amount of capital losses incurred after April 1, 2017, as well as capital losses brought forward from years prior to that date, with no offset for capital gains realized prior to April 1, 2017.

Read a January 2025 report prepared by the KPMG member firm in India 

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