Stock Derivatives Are Not ‘Shares’: ITAT Delhi Rules on India-Mauritius Tax Treaty

Estee India fund Vs ACIT (ITAT Delhi) Background and Context: In a significant ruling for Foreign Portfolio Investors (FPIs), the Delhi Tribunal has clarified the taxability of gains arising from stock derivative transactions under the India–Mauritius Double Taxation Avoidance Agreement (DTAA). The decision assumes importance in the post-2017 amendment era, where gains from transfer of shares acquired on or after 1 April 2017 have been made taxable in India. The key controversy addressed in this case was whether stock derivatives—being linked to underlying shares—can also be brought wit...