Tax treaty termination requires diplomatic notice and establishes staggered effective dates for withholding and other income taxes.

Either Contracting State may terminate the Agreement through diplomatic channels by giving at least six months' notice after five years from entry into force; such notice produces staggered effective dates: in India the Agreement ceases for withholding taxes for amounts paid or credited on or after 1 April of the calendar year following notice and for taxes on income for fiscal years beginning on or after that 1 April, while in Iceland it ceases for withholding on income derived on or after 1 January of the calendar year following notice and for other income taxes for tax years beginning on or after that 1 January.

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