Direct Tax

Within India's dynamic financial landscape, the rise of non-banking financial companies (NBFCs) has been transformative, catering to diverse financial needs. Yet, within this thriving sector, asset-light companies encounter a maze of regulatory hurdles that may impede their growth and operational agility.

The Inland Revenue Authority of Singapore (IRAS) has recently introduced a significant change impacting investors in the form of a capital gains tax on the transfer of 'foreign assets' – the Foreign Disposal Tax or FDT. Effective from 1 January 2024, the amendment aims to tax the disposal of foreign assets by entities resident in Singapore under certain circumstances. 

For global investors looking to participate in the attractive India growth story, navigating the complex terrain of tax regulations can be challenging. In this regard, international tax treaties offer global investors much needed certainty with respect to the cross-border tax implications for their global income. Historically, India-Mauritius and India-Singapore tax treaties have offered benefits to investors from these countries in the form of capital gains tax exemptions.