New Delhi, Oct. 14 -- The Income Tax Department has notified amendments to the India-Mauritius Double Taxation Avoidance Agreement (DTAA), introducing a principal purpose test (PPT) that allows tax treaty benefits to be denied if obtaining such benefits was one of the main purposes of a transaction or arrangement.

According to the notification, treaty benefits will not be granted if, based on the relevant facts and circumstances, it is reasonable to conclude that obtaining the benefit was one of the principal purposes of an arrangement or transaction, unless granting the benefit is consistent with the objectives of the relevant treaty provisions.

The amendment aims to prevent the misuse of tax treaty provisions to avoid or reduce taxes ...