CBDT issues clarification on Circular No. 01/2025 On Application of PPT under India’s DTAAs
CBDT has issued Circular No. 01/2025 dated 21.01.2025 as a guidance to provide clarity and certainty on the application of the Principal Purpose Test (PPT) provision under India’s Double Taxation Avoidance Agreements (DTAAs).
It has been further clarified that:
1. The Circular seeks to provide guidance on the application of the PPT provision under India’s DTAAs, wherein such a provision exists. Therefore, this circular shall apply to the PPT provision in only those Indian DTAAs wherein such a provision exists.
2. The Circular is not intended to interfere or interact with any other provision of the Indian DTAAs, including such provisions that may be invoked for examination of treaty entitlement or denial of treaty benefits, other the PPT.
3. The Circular is not intended to interfere or interact with anti-abuse rules under the domestic laws, such as General Anti Abuse Rules (GAAR) and Specific Anti-Abuse Rules (SAAR) and Judicial Anti Abuse Rules (JAAR) reflected in or resulting from judicial interpretations. Such rules shall continue to operate independently.
4. This clarification does not introduce any new legal interpretation but reaffirms that the circular applies only to the PPT without affecting other provisions of the Income Tax Act, 1961. The Government remains committed to ensure consistency in tax law interpretation while upholding the existing legal framework.
Downlaod CBDT Press Release Click Here >>
After holding that the cash receipts and cash payments are unexplained, ad-hoc estimation of income can not be adopted –…
Dividing total turnover by 365 days and concluding that assessee could not have made such cash sale on a single…
NERIST Arunachal Pradesh invites EoI for Empanelment of Chartered Accountant firm North Eastern Regional Institute of Science and Technology, (NERIST)…
Sibsagar University invites Expression of Interest (EOI) for Appointment of Internal Auditor Sibsagar University invites Expression of Interest (EOI) from reputed…
In a recent judgment Andhra Pradesh High Court struck down Section 147A of the Income Tax Act, 1961 as unconstitutional.…
Bank was liable to pay compensation to borrower as it did not verify the progress of construction before loan disbursals…