Press Release on Amending Protocol to India-France tax treaty

 This Tax Alert summarizes a Press Release  dated 23 February 2026 issued by the Ministry of Finance (MoF) announcing amendments to the India-France Double Taxation Avoidance Agreement (DTAA or tax treaty) vide an Amending Protocol signed by India and France.

The Press Release highlights that the Amending Protocol proposes to provide:

• Taxing rights to the source country (say, India) on capital gains arising from the transfer of shares of a company resident in that country (India), irrespective of the percentage of holding by a French resident, leading to sunset in respect of portfolio exemption present in the tax treaty.
• Deletion of Most Favored Nation (MFN) clause.
• Withholding tax rates on dividend income reduced from the present rate of 10% to 5% (in case of holding of at least 10%) and 15% in other cases.
• Narrow scope for Fees for Technical Services (FTS) and inclusion of Service permanent establishment (PE) clause.
• Amendment to Exchange of Information (EOI) provision and addition of a new Article on Assistance in Collection of Taxes.
• Incorporation of applicable provisions of Base Erosion and Profit Shifting Multilateral Instrument (BEPS MLI) in the DTAA that had already become applicable pursuant to MLI ratification.

The Amending Protocol will be effective on completion of internal procedures under the laws of both the countries and subject to such terms as agreed between the two countries.

Similarly, France has also issued a press release in French dated 18 February 2026 providing a brief overview of the Amending Protocol.

The text of the Amending Protocol is not yet available in public domain.