Dividend Taxation: no withholding on dividends from Indian companies while domestic exemption remains; capital gains rules clarified.

The Protocol clarifies that dividend taxation will follow India's domestic exemption under section 10(34) so no withholding arises on dividends from Indian companies while that regime continues; gains on shares acquired before 1 April 2017 are taxable only in the seller's resident State; paragraph 3 of Article 24 does not prevent a State from taxing profits of a foreign company's permanent establishment at higher rates than for domestic companies; Article 27 does not require either State to adopt measures contrary to its laws, administrative practice or public policy for tax collection.

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