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India: Protocol signed to amend income tax treaty with France

Changes to capital gains, dividend taxation, and permanent establishment rules

february 23, 2026

The Central Board of Direct Taxes (CBDT) today released a press release announcing the signing of a protocol to amend the India-France income tax treaty. Amendments include:

  • Allocating taxing rights on capital gains arising from the sale of shares to the source country
  • Removing the most favored nation (MFN) clause
  • Introducing a differential dividend tax rate depending on the shareholding
  • Amending the definition of fees for technical services (FTS)
  • Introducing a service permanent establishment (PE) clause

Read a February 2026 report prepared by the KPMG member firm in India

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