India–Singapore DTAA (Tax Treaty): A 2026 Guide for Businesses

The India–Singapore DTAA still caps Indian tax on dividends, interest, royalties and technical fees at 10% or 15%, but it now protects Indian shares from Indian capital gains tax only if they were acquired before 1 April 2017, and only if the seller passes Article 24A. That article looks back over the two 12-month periods before a sale, so a Singapore company selling a pre-2017 Indian stake in 2027 is already inside its test period. Its CFO must decide now whether its spending, decisions and records match Fullerton (relief allowed) or Hareon (denied).

India–Singapore DTAA in 2026: three decisions

1. Rates. The caps on dividends, interest, royalties and technical fees are unchanged (Arts 10–12).
2. Exit. Gains on shares acquired before 1 April 2017 are taxable only in Singapore, subject to Article 24A (Art 13(4A)). India may tax gains on later shares (Art 13(4B)).
3. Protection beyond tax. We found no bilateral investment treaty (the DEA lists none), but Chapter 6 of the 2005 Comprehensive Economic Cooperation Agreement (CECA) gives investor–state arbitration to Singapore companies with real operations.

The treaty was signed on 24 January 1994 and in force from 27 May 1994. The 2005 Protocol (S.O. 1022(E)) set the 10% royalty and fee cap; the 2011 Protocol covers information exchange. The Third Protocol (signed 30 December 2016, in force 27 February 2017, S.O. 935(E)) rewrote Article 13 and added Article 24A from 1 April 2017, and added Article 28A.

Rates that apply now

These are ceilings: a lower domestic rate applies, because the Act applies where “more beneficial” (s.159(4), Income-tax Act 2025). Domestic rates are in our India withholding tax rates insight. Amounts above arm’s length lose the cap (Arts 11(6), 12(8)). The 25% dividend test counts “shares”, not votes. The half-rate on post-2017 shares (Art 13(4C)) covered only gains arising from 1 April 2017 to 31 March 2019 and is spent.

Servicing India from Singapore. Services furnished in India through employees or other personnel, other than technical services within Article 12 (taxed under the 10% fee cap), create a permanent establishment (PE) if they continue for more than 90 days in a fiscal year, or more than 30 days for a related enterprise (Art 5(6)). The 183-day periods apply only to building sites, supervision of them and mineral-oil services (Art 5(3)–(5)).

Who can claim: residence, the COR and Form 41

A non-resident needs a certificate of residence from its own government and the prescribed information (s.159(8), Income-tax Act 2025), which is Form 41, with supporting documents kept for the tax officer (r.75(1)–(2), Income-tax Rules 2026). Filing steps are in our Form 10F and Form 41 insight.

The Inland Revenue Authority of Singapore (IRAS) issues the Certificate of Residence (COR). IRAS treats a company as resident where control and management, meaning strategic decisions, is exercised. IRAS looks at where board meetings are held and where directors and key employees are based. Foreign-owned holding companies with purely passive income are “generally not considered tax residents” unless they meet further conditions. A dual-resident company is resident where its place of effective management is (Art 4(3)).

A COR is not the end of it. In Tiger Global (2026 INSC 60, 15 January 2026), the Supreme Court called the certificate an “eligibility condition”, not “sufficient” evidence (para 37). That was an India–Mauritius case (Mauritius sellers of shares in a Singapore company), so it applies to Singapore claimants by analogy; the Delhi Tribunal took the same line in Hareon.

Selling Indian shares: the 1 April 2017 line

For shares in an Indian company, the acquisition date decides the treaty position. Shares acquired before 1 April 2017 are taxable “only” in the seller’s state of residence (Art 13(4A)), subject to Article 24A. India may tax gains on shares acquired from that date at domestic rates (Art 13(4B)).

Two rules narrow the challenge to a grandfathered gain:

• GAAR (Chapter XI) does not apply to income from transferring investments made before 1 April 2017 (r.128(1)(d) and (2), Income-tax Rules 2026, as substituted by Notification 55/2026, 31 March 2026).
• The CBDT says the grandfathering in the Cyprus, Mauritius and Singapore treaties is outside the principal purpose test (PPT) and governed by each treaty’s own provisions (Circular 1/2025, 21 January 2025, Part B).

The live questions are therefore residence and Article 24A. Shares received after 1 April 2017 through bonus or rights issues or conversions need separate analysis: the treaty asks when shares were “acquired”, and we found no ruling on them. For other treaties, see where India still can’t tax your exit.

Article 24A: what the limitation of benefits demands

Article 24A applies only to claims under Article 13(4A) and 13(4C), not to dividends, interest, royalties, fees or post-2017 gains. It has three parts:

1. Primary purpose test. No benefit if the company’s “affairs were arranged with the primary purpose” of taking the Article 13(4A) or 13(4C) benefit (Art 24A(1)).
2. Shell or conduit test. No benefit for a company with “negligible or nil business operations” or “no real and continuous business activities” in Singapore (Art 24A(2)).
3. Expenditure rule. A company is deemed a shell if its annual expenditure on operations in Singapore is below S$200,000 “for each of the 12 month periods” in the 24 months before the gain arises. These are the two 12-month periods immediately before the date the gain arises, not necessarily financial years. It is deemed not a shell if it reaches that figure in each period or is listed on the Singapore Exchange (Art 24A(3)–(5)). Whether a company that reaches the figure in only one of the two periods is deemed a shell is an unresolved question under Article 24A(3)–(4); on one reading it is, but disqualification is not settled. Plan to reach the figure in both periods.

The figure is not a safe harbour. The Explanation sends “legal entities not having bona fide business activities” to the primary purpose test, whatever they spend.

Hareon and Fullerton: same article, opposite results

What separates them:

• Employees are not decisive. Fullerton had no staff of its own either, as the Revenue stressed (para 5.2); its people sat in a group management company paid by fee (para 8.1), and that spending counted. The Tribunal accepted those outsourced costs on the evidence of an established group investment-management structure (paras 8.1, 9); paying S$200,000 to advisers does not by itself show substance. Hareon lacked decisions in Singapore and spending beyond a consultant.
• Residence can fail first. The Delhi Tribunal found control and management outside Singapore. A certificate issued on the company’s own statement that control “will be exercised in Singapore” (para 9.1) was “not conclusive” (para 9.5). Relief on debentures claimed under Article 13(5), which Article 24A does not cover, also failed (para 9.6).
• Records can follow; facts cannot. Fullerton’s IRAS and auditor letters date from 2023, for a 2021 sale; the spending had to exist in the window.
• Neither is an MLI or Tiger Global case. Both applied Article 24A, though Fullerton called it the “Principal Purpose Test” (para 5.3). The Delhi hearing ended on 5 January 2026; Tiger Global was only noted (para 9.7). Fullerton also relied on sovereign ownership (para 9.2), which most groups lack.

We found no report of an appeal in either case as of 29 October 2026.

Worked example: selling a grandfathered stake, and the evidence file

A European group’s Singapore company bought 26% of an unlisted Indian company in 2014 for INR 80 crore and will sell for INR 380 crore on 1 April 2027. The Article 24A periods are 1 April 2025 to 31 March 2026 (closed) and 1 April 2026 to 31 March 2027 (running). They match financial years only because the sale is on 1 April 2027; a sale on another date moves both periods. Figures are illustrative.

The evidence file, built before completion:

1. Acquisition date. Allotment or transfer records and foreign-investment filings showing acquisition before 1 April 2017 (Art 13(4A)).
2. Residence. A COR covering the sale date and Form 41 for Indian tax year 2027-28, in which completion falls (s.159(8); r.75).
3. Decisions in Singapore. Board minutes of the sale and other strategic decisions, with Singapore-based directors and bank signatories (Art 4(1) and IRAS’s control-and-management test; Hareon).
4. Spending by period. A schedule showing at least S$200,000 spent on operations in Singapore in each period, with invoices, contracts and an auditor’s certificate, kept as the spending happens (Art 24A(3)–(4)). An IRAS confirmation is helpful supporting evidence, as in Fullerton, but the treaty does not require one.
5. Purpose. Records from 2014 showing why Singapore: regional management, other investments, financing (Art 24A(1) and Explanation). Fullerton called this “a question of fact and degree” (para 7.7).
6. Continuing activity. Board seats, investee reporting and other holdings, answering “real and continuous business activities” (Art 24A(2)).

Weak points: spending paid almost all to an outside provider, directors all abroad, and a COR resting on a forward-looking declaration. The first period has closed; its gaps cannot be repaired.

Other income: Article 28A, GAAR and the MLI

Dividends, interest, royalties, fees and post-2017 gains face different gates:

• Beneficial ownership. The caps in Articles 10–12 apply only to the beneficial owner.
• Domestic anti-avoidance. The treaty preserves domestic anti-avoidance law (Art 28A), and GAAR applies even where the treaty is more beneficial (s.159(6)).
• The MLI. The Income Tax Department’s synthesised text applies only the MLI preamble (Art 6) and PPT (Art 7(1)) to this treaty, in India from 1 April 2020; it leaves the PE article alone. The text says it “does not constitute a source of law”, and two tribunal benches have held, for the India–Ireland treaty, that the MLI PPT needs a treaty-specific notification. As of 29 October 2026 we found no Singapore-specific notification. Officers may still apply the test, so plan as if it applies; the reasoning is in our India–UAE tax treaty guide.

Beyond tax: CECA Chapter 6

The CECA was signed on 29 June 2005 and in force from 1 August 2005 (Art 16.8(1)). Its investment chapter covers shares and debentures (Art 6.1(1)(b)), whenever made (Art 6.2(1)), and provides:

• national treatment after establishment (Art 6.3.2) and, in listed sectors, on entry (Art 6.3.1, which cannot be taken to arbitration), neither extending to benefits under tax treaties or tax legislation (Art 6.3.4);
• expropriation only on a non-discriminatory basis, for a purpose authorised by law, with due process and against compensation (Art 6.5);
• free transfer of capital and returns, including dividends, capital gains and sale proceeds (Art 6.6);
• investor–state arbitration after six months of consultations, under ICSID rules (the Convention or its Additional Facility) or UNCITRAL rules (or in Indian courts), filed within three years of when the investor became aware, or should reasonably have become aware, of the breach, on 30 days’ notice and with a waiver of other forums (Art 6.21).

We found no fair-and-equitable-treatment clause, and non-discriminatory public-interest measures are shielded (Art 6.10). Two limits matter for a holding company:

• Real operations. An “enterprise” excludes an entity “with negligible or nil business operations or with no real and continuous business activities” in Singapore (Art 6.1(6)). These are the words of the Article 24A(2) shell test, so one substance file serves both.
• Denial of benefits. India may deny benefits where the company has “no substantial business operations” in Singapore, “or” where Indian investors own or control it (Art 6.9(1)). Round-tripped Indian money is therefore exposed even with substance.

Either state may end the CECA on six months’ notice (Art 16.8(2)); earlier investments would stay protected for 15 years (Art 6.24). We found no termination notice. The 2014 ASEAN–India Investment Agreement, which Singapore also signed, coexists with CECA Chapter 6; coverage, exclusions and dispute rights must be checked under each. For the UAE comparison, see Singapore vs UAE to hold an Indian investment.

Common questions

What is the dividend rate under the India Singapore DTAA?

10% for a company owning at least 25% of the payer’s shares, otherwise 15% (Art 10(2)), or the domestic rate if lower.

Does the India Singapore tax treaty still exempt capital gains on Indian shares?

Only for shares acquired before 1 April 2017, and only if the seller passes Article 24A (Art 13(4A)). Later shares are taxable in India (Art 13(4B)).

Is spending S$200,000 a year in Singapore enough to pass Article 24A?

No. It only stops the company being deemed a shell; the primary purpose test still applies (Art 24A(1) and Explanation). In Hareon (ITAT Delhi, 30 January 2026), the accounts showed about S$400,000 a year, mostly a consultant’s fees, but the Tribunal applied Article 24A(1) and, with no IRAS confirmation of the expenditure test, Article 24A(2) and (3) as well.

Does the MLI principal purpose test apply to grandfathered Singapore share gains?

The CBDT says not: the grandfathering is governed by the treaty’s own provisions, which for Singapore means Article 24A (Circular 1/2025, para 4.B). GAAR also does not apply to transfers of pre-April 2017 investments (r.128).

Does India have an investment treaty with Singapore?

We found no bilateral investment treaty in the DEA’s list. CECA Chapter 6 gives arbitration to Singapore companies with real operations (Art 6.21), with 15 years’ cover if the CECA ends (Art 6.24). Singapore also signed the 2014 ASEAN–India Investment Agreement, which excludes tax measures except transfers (Art 1(2)(d)); whether it is in force for Singapore is unverified.

Points to review

• Acquisition dates. Indian shares are split into pre- and post-1 April 2017 acquisitions, with bonus, rights and converted shares flagged.
• Article 24A window. Before any sale of pre-2017 shares, Singapore operating spend is tracked against S$200,000 for each of the two prior 12-month periods.
• Decision-making. Board meetings, signatories and strategic decisions sit in Singapore and meet IRAS’s tests.
• Purpose record. A dated record explains why India is held through Singapore, beyond the treaty benefit.
• Paperwork. A COR for the right period and Form 41 for the Indian tax year are in place before the treaty rate is applied.
• CECA standing. Ownership is checked against Article 6.9’s Indian-control limb, and the substance file also supports Article 6.1(6).

Sources

1. Agreement between India and Singapore for the avoidance of double taxation (signed 24 January 1994; in force 27 May 1994), consolidated text with notifications GSR 610(E) of 8 August 1994, S.O. 1022(E) of 18 July 2005, S.O. 2031(E) of 1 September 2011 and S.O. 935(E) of 23 March 2017. Income Tax Department. https://www.incometaxindia.gov.in/w/singapore-comprehensive-agreements-1 [TAX-DTAA_Singapore.txt]
2. Third Protocol amending the India–Singapore DTAA, signed 30 December 2016, in force 27 February 2017, Notification No. 18/2017, S.O. 935(E), 23 March 2017. Ministry of Finance (Department of Revenue), linked from the ITD treaty page. https://www.incometaxindia.gov.in/w/singapore-comprehensive-agreements-1 [TAX-DTAA_Singapore_notification18-2017.txt]
3. Synthesised text of the MLI and the India–Singapore DTAA. Income Tax Department, viewed 29 October 2026. https://www.incometaxindia.gov.in/w/singapore-synthesised-text-1 [TAX-DTAA_Singapore_MLI-synthesised-text_EXCERPTS_retrieved-29-Oct-2026.txt]
4. Income-tax Act 2025, s.159. Income Tax Department. https://www.incometaxindia.gov.in/w/section-159-85 [ITA2025_s159.txt]
5. Income-tax Rules 2026, G.S.R. 198(E), 20 March 2026 (r.75). CBDT. https://www.incometaxindia.gov.in/documents/81799/11848482/En-Notified-IT-Rules-2026-20-03-2026.pdf/a332bf2a-da14-8b94-dde2-5a2ea1428318?t=1773990110473 [GIFT_IT_RULES_2026.pdf]
6. CBDT Notification No. 55/2026, G.S.R. 241(E), 31 March 2026 (r.128). CBDT. https://www.incometaxindia.gov.in/documents/d/guest/notification-no-55-2026-1-pdf [LAW-Tax_CBDT-Notification-55-2026_Rule-128-2026-Rules_31-Mar-2026.pdf]
7. CBDT Circular No. 01/2025, 21 January 2025, “Guidance for application of the Principal Purpose Test (PPT) under India’s Double Taxation Avoidance Agreements”. CBDT. https://www.incometaxindia.gov.in (direct link not captured) [LAW-Tax_CBDT-Circular-01-2025_PPT-Guidance_21-Jan-2025.pdf]
8. The Authority for Advance Rulings (Income Tax) v Tiger Global International II Holdings, 2026 INSC 60, 15 January 2026. Supreme Court of India. https://www.sci.gov.in/sci-get-pdf/?diary_no=12512025&type=j&order_date=2026-01-15&from=latest_judgements_order [CASE-Tax_Tiger-Global_SC_2026-INSC-60_15-Jan-2026.pdf]
9. Hareon Solar Singapore Pte Ltd v DCIT (International Taxation), ITA 2226/Del/2024, AY 2020-21, ITAT Delhi, 30 January 2026 (Ramit Kochar, AM; Raj Kumar Chauhan, JM). Income Tax Appellate Tribunal. https://itat.gov.in/public/files/upload/1769765889-VpzT5B-1-TO.pdf [CASE-Tax_Hareon-Solar-Singapore-v-DCIT_ITAT-Delhi_ITA-2226-Del-2024_30-Jan-2026_OFFICIAL.txt]
10. Fullerton Financial Holdings Pte Ltd v ACIT (International Taxation), ITA 1137/Mum/2025, AY 2022-23, ITAT Mumbai, 28 October 2025. Official copy not retrieved; date, paragraph numbers and quotes are taken from an unofficial reproduction of the order. [CASE-Tax_Fullerton-Financial-Holdings-v-ACIT_ITAT-Mumbai_ITA-1137-Mum-2025_28-Oct-2025_EXCERPTS_bharattax.txt]
11. Sky High Appeal XLIII Leasing Company Ltd / TFDAC Ireland II, ITA 1122/Mum/2025 and 1198/Mum/2025 and others, ITAT Mumbai ‘I’ Bench, 13 August 2025; Kosi Aviation Leasing Ltd and others, ITA 994/Del/2025 and others, ITAT Delhi ‘D’ Bench, 30 September 2025. Income Tax Appellate Tribunal. https://itat.gov.in [CASE-Tax_Sky-High-XLIII-and-TFDAC-Ireland-II_ITAT-Mumbai_ITA-1122-and-1198-Mum-2025_13-Aug-2025.pdf; CASE-Tax_Kosi-Aviation-Leasing-group-of-75_ITAT-Delhi_ITA-994-Del-2025_30-Sep-2025.pdf]
12. India–Singapore Comprehensive Economic Cooperation Agreement, signed 29 June 2005, Ch 6 (Arts 6.1, 6.2, 6.3, 6.5, 6.6, 6.9, 6.10, 6.21, 6.24) and Ch 16 (Art 16.8). Department of Commerce. https://commerce.gov.in/international-trade/trade-agreements/ (index page; chapter URL not confirmed) [TRADE-InForce_Singapore-CECA_11_Chapter-6-Investment.pdf; TRADE-InForce_Singapore-CECA_21_Chapter-16-Generaland-Final-Provisions.pdf]
13. “Tax Residency of a Company / Certificate of Residence”. Inland Revenue Authority of Singapore, page last updated 23 June 2025. https://www.iras.gov.sg/taxes/corporate-income-tax/basics-of-corporate-income-tax/tax-residency-of-a-company-certificate-of-residence [not in client folder]

Related insights

• Singapore vs UAE to hold an Indian investment – how the two holding routes compare.
• Invest in India: choosing a holding company jurisdiction – Singapore against the UAE, Netherlands, UK and US routes.
• Where India still can’t tax your exit, and the MFN scorecard – grandfathered and residence-only share gains across India’s treaties.
• India withholding tax rates and repatriation – domestic rates to set against the treaty caps.
• Form 10F and Form 41: tax residency certificates in India – filing the certificate and form a treaty claim needs.
• Permanent establishment risk and employers of record – PE risk from staff working in India.
• India–UAE tax treaty: a guide for businesses – the MLI notification question in detail.

Disclaimer: This article is general information, not tax or legal advice; rules change, so check the current position and take advice on your facts before acting.