Govt resumes talks with Mauritius to revise DTAA

While the government has been pressing for re-negotiating Mauritius DTAA seeking to plug the loopholes and revenue leakages, some experts have raised concerns that the move may impact the foreign direct investment (FDI) into the country

New Delhi: The government today said that it has resumed talks with Mauritius for re-negotiation of the Double Taxation Avoidance Agreement (DTAA), a 30-year-old treaty which has been used by investors to save taxes, reports PTI.

"As far as DTAA with Mauritius is concerned, it is nothing new. It is an old one. For some time talks were suspended. Now it is resumed," finance minister Pranab Mukherjee told reporters here on the sideline of a CAG seminar.

Earlier yesterday, finance secretary Sunil Mitra had said, "The discussions are likely to resume on re-negotiation of the three-decade old DTAA (with Mauritius) in July or August"

While the government has been pressing for re-negotiating Mauritius DTAA seeking to plug the loopholes and revenue leakages, some experts have raised concerns that the move may impact the foreign direct investment (FDI) into the country.

On this, economic affairs secretary R Gopalan, "One agreement (renegotiating DTAA with Mauritius) would not make any difference on FDI inflows (in the country)."

India receives 42% of its foreign direct investment (FDI) routed through Mauritius. Likewise about 40% of the foreign institutional investor (FII) fund flows in the country are believed to be routed through the island nation. A large majority of them are third-country investors which use the DTAA for saving capital gains tax.

According the DTAA, capital gains from sale of shares by residents of Mauritius in India would be liable to tax only in that country. As Mauritius does not have capital gain tax, there is no burden on investors routing money in India through a circuitous route.

In the wake of pressure on the government to go after black money, it is in the process of renegotiating the DTAA with several countries mainly tax havens like Mauritius.

Experts, however, said that re-negotiation of the DTAA would not be of much help. Instead, the FII investments into country would be impacted if capital gains tax is imposed.

"Negotiating the treaty will not give desired results to the government. Renegotiation of the treaty will undermine India's confidence in other countries. We have an agreement with Singapore too," KR Sekar, partner, Deloitte Haskins & Sells said.

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Religare Global Asset Management appoints Alan Berkshire as president—North America

Alan brings to RGAM 20 years of experience in structuring and executing strategic business transactions

Religare Global Asset Management (RGAM), a wholly-owned subsidiary of financial services group, Religare Enterprises, said that it has appointed Alan Berkshire as the president-North America.

RGAM's strategy is to acquire equity stakes in top-tier asset management firms around the world with proven performance and capabilities in traditional as well as alternative asset classes. RGAM aims to facilitate the growth of its affiliates by providing wider sales and distribution support and facilitating access to capital and deal flow in countries where Religare's broader financial services platform has a presence.

RGAM platform has about $11.5 billion of assets under management. Alan joins RGAM with over 13 years of experience in the asset management industry, most recently as a founding partner of Estancia Capital Management, LLC and prior thereto having served for over 10 years at Nuveen Investments Inc., where his roles included Member of the Office of the Chairman, Head of the Institutional Services Group, Head of the Closed-end Fund/Structured Product Group, and General Counsel. Alan also brings to RGAM 20 years of experience in structuring and executing strategic business transactions and equity ownership arrangements at Nuveen Investments and at the international law firm Kirkland & Ellis LLP, where he was a partner before joining Nuveen.

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NPCI ties up with BoI for “RuPay” cards

The card, named “Dhan Aadhar”, has the 12-digit Aadhar number given by the Unique Identification Authority of India, besides the conventional 19-digit number

The indigenous alternative in the payments space to Mastercard and Visa, RuPay, took a big stride with Reserve Bank of India-promoted National Payments Corporation of India (NPCI) launching the card in partnership with Bank of India. Bank of India becomes the fourth partner bank for NPCI. Over the past two months, it has tied up with three regional rural and co-operative banks and distributed 10,000 cards, NPCI's managing director and chief executive AP Hota said.

The card, named "Dhan Aadhar", has the 12-digit Aadhar number given by the Unique Identification Authority of India, besides the conventional 19-digit number. It also carries a photograph of the accountholder, which helps it serve as an ID-card like a passport, Bank of India chairman and managing director Alok Misra said. The Padgha village was chosen for the launch as all the residents in the local gram panchayat have already got Aadhar numbers, he said. Hota said his organisation has already integrated with the servers of the UIDAI which would enable it real time access to cross-verify details like biometrics and photograph.

Through this card, an accountholder can transact by giving thumb impression at a terminal manned by a business correspondent in the rural areas while it can act like a conventional card at an ATM, where the accountholder will have to give a four-digit PIN, he added. When asked if it will also allow transactions at merchant outlets and work like a debit card, Hota replied in the negative. The NPCI would be required to do more integration and call for more regulatory clarity to do so, he said.

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