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The Central Board of Direct Taxes clarified that the new Principal Purpose Test rule won't affect past investments under tax treaties with Mauritius, Cyprus, and Singapore, relieving taxpayer concerns. This test aims to scrutinise exemptions and prevent misuse of tax treaties for unjustifiable tax savings.
The Central Board of Direct Taxes (CBDT), has clarified that past investments made under certain tax treaties with countries like Mauritius, Cyprus, and Singapore will not be affected by a new rule called the Principal Purpose Test (PPT).
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