India: Protocol signed to amend income tax treaty with France
Changes to capital gains, dividend taxation, and permanent establishment rules
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