India and France sign Amending Protocol to their 1992 Double Taxation Avoidance Convention
India and France signed a Protocol amending their Double Taxation Avoidance Convention of 29 September 1992, the Finance Ministry announced on 23 February 2026, giving full capital-gains taxing rights to the country where a company is resident and deleting the MFN clause.
Summary
India and France signed a Protocol amending their Double Taxation Avoidance Convention of 29 September 1992, the Finance Ministry announced on 23 February 2026; it was signed during the recent visit of the French President by CBDT Chairperson Ravi Agrawal and French Ambassador Thierry Mathou. The Protocol gives full taxing rights on capital gains from the sale of shares to the country where the company is resident, deletes the Most-Favoured-Nation (MFN) clause, and replaces the single 10% dividend rate with 5% for holders of at least 10% of capital and 15% for others. It also aligns 'Fees for Technical Services' with the India–US treaty, adds a Service Permanent Establishment, introduces an Article on Assistance in Collection of Taxes and incorporates the applicable BEPS Multilateral Instrument provisions.
Key facts
- Announced
- 23 February 2026 (Ministry of Finance)
- Original treaty
- India–France DTAC, signed 29 September 1992
- Signatories
- Ravi Agrawal (CBDT Chairperson) and Thierry Mathou (Ambassador of France)
- Capital gains
- Full taxing rights to company's country of residence
- Dividends
- 5% (≥10% holding) and 15% (others), replacing 10%
- Other
- MFN clause deleted; Service PE added; Assistance in Collection of Taxes; BEPS MLI provisions
Practice MCQs 3 questions
Under the India–France Amending Protocol of February 2026, the single 10% tax rate on dividends is replaced by:
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Correct answer: A — 5% for holders of at least 10% of capital and 15% for others
The Protocol replaces the single 10% rate with 5% for those holding at least 10% of capital and 15% in all other cases.
In which year was the original India–France Double Taxation Avoidance Convention signed?
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Correct answer: B — 1992
The India–France DTAC was signed on 29 September 1992.
Consider the following statements about the India–France Amending Protocol announced in February 2026: 1. It deletes the Most-Favoured-Nation (MFN) clause from the Protocol to the DTAC. 2. It gives taxing rights on capital gains from the sale of shares to the country where the shareholder is resident. Which of the above is/are correct?
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Correct answer: A — 1 only
Only 1 is correct. The Protocol deletes the MFN clause and gives full capital-gains taxing rights to the country where the company (not the shareholder) is resident.