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Principal Purpose Test (PPT)
February 1 , 2025
16 hrs 0 min
17
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- The Central Board of Direct Taxes (CBDT) has issued the updated guidance for the application of the Principal Purpose Test (PPT) under India’s Double Taxation Avoidance Agreements (DTAAs).
- It exempts certain provisions under the India-Cyprus DTAA, India-Mauritius DTAA, and India-Singapore DTAA.
- PPT is a part of international tax rules aimed at preventing misuse of tax treaties.
- It is a key provision under the Multilateral Convention to Implement Tax Treaty related provisions to prevent Base Erosion and Profit Shifting (BEPS).
- DTAAs are bilateral treaties aimed at preventing the same income from being taxed twice.
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