GK and monthly revision

India tightens Sri Lanka tax treaty with anti-abuse rule

India has amended its tax treaty with Sri Lanka to incorporate a Principal Purpose Test (PPT), which enables authorities to deny treaty benefits if tax advantage is a primary goal of an arrangement. This amendment, effective for income from FY28, aims to combat treaty shopping and align the Double Taxation Avoidance Agreement (DTAA) with global anti-tax avoidance standards. This is significant as it reflects India's commitment to enhancing tax compliance and transparency in international taxation.