The protocol incorporates BEPS measures, including the Principal Purpose Test, updated dependent agent PE rules, enhanced information exchange, and new assistance in tax collection.

Fees for Technical Services are redefined to align with the India-US DTAC, and a new Service Permanent Establishment provision taxes service income in India beyond defined thresholds.

The Service PE expands the PE scope to cover foreign enterprises whose employees provide services in India for a defined period, increasing the cross-border service tax base.

Exchange of Information provisions are updated and a new Assistance in Collection of Taxes article is introduced to strengthen mutual tax cooperation.

The protocol grants full taxing rights on capital gains from the sale of shares to the country of residence of the company.

The article cites reporting by Reuters journalist Nikunj Ohri.

The changes were announced in New Delhi on February 23, 2026, with Reuters reporting the development.

The protocol integrates BEPS Multilateral Instrument provisions applicable to India and France.

BEPS-related measures, including the Principal Purpose Test and anti-fragmentation rules, are incorporated into the DTAC.

India and France overhauled their DTAC to broaden India’s taxing rights on capital gains and introduce a differentiated dividend tax structure, signaling a strategic shift in cross-border taxation and investment planning between the two nations.

Dividend income will be taxed at 5% for shareholders owning at least 10% of a company and 15% for all other investors.