The Union Cabinet chaired by the Prime Minister Shri Narendra Modi, has given its approval for amending the Double Taxation Avoidance Convention (DTAC) signed between India and Turkmenistan in 1997 for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income and on capital, through a Protocol.

The Protocol provides for internationally accepted standards for effective exchange of information on tax matters including bank information and information without domestic tax interest. It is further provided that the information received from Turkmenistan in respect of a resident of India can be shared with other law enforcement agencies with authorisation of the Competent Authority of Turkmenistan and vice versa.

The Protocol further provides for 'Limitation of Benefits' Article as an anti-abuse provision aimed at preventing misuse of the Convention. The provisions of this Article enable use of the provisions of domestic law and measures concerning tax avoidance or evasion in the event of misuse of the Convention.

Exchange of information expanded to include bank data and authorised sharing; Limitation of Benefits added to curb treaty abuse. The Protocol amends the India-Turkmenistan tax convention to adopt international standards for exchange of information, including bank information and information without domestic tax interest, and allows information to be shared with other law enforcement agencies with Competent Authority authorisation. It also introduces a Limitation of Benefits anti abuse provision permitting the use of domestic law and measures against tax avoidance or evasion when the Convention is misused.