Taxability of Derivatives – Article 13(4) of India-Mauritius DTAA

3 Sigma Global Fund Vs ACIT (ITAT Mumbai) Background: The Mumbai Income Tax Appellate Tribunal (ITAT) recently delivered an important decision in the case of M/s 3 Sigma Global Fund v. ACIT concerning the taxability of gains arising from derivative transactions undertaken by a Mauritius-based Foreign Portfolio Investor (FPI). This decision clarifies the applicability of the India–Mauritius Double Taxation Avoidance Agreement (DTAA) to derivative instruments, providing helpful precedent for similarly placed taxpayers. 1. Facts The assessee, 3 Sigma Global Fund, is a Mauritius-incorporated e...