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SC ruling against Tiger Global prompts I-T Dept to issue notices to 7 overseas VC and PE firms over treaty benefit claims
Tax notice (Representative Image)
Buoyed by the Supreme Court’s ruling denying tax treaty benefits to US investment firm Tiger Global, India’s tax authorities have, over the past two weeks, issued notices to at least seven overseas venture capital and private equity firms.
The Income Tax (I-T) department has sought extensive information from these funds to assess their “substance” in Mauritius and Singapore — jurisdictions commonly used by foreign investors to channel investments into India. In several notices, officials have specifically cited the Tiger Global judgment.
GAAR May Be Invoked
Tax officers from Mumbai and Bengaluru are seeking detailed disclosures from these offshore entities, many of whose scrutiny assessments are set to become time-barred on March 31, 2026.
The cases under review involve investors who have sold stakes in Indian companies — directly or indirectly — without paying capital gains tax, relying on India’s tax treaties with Mauritius and Singapore.
The department believes that gathering additional details about the funds’ operations in these jurisdictions will strengthen its position as it finalises scrutiny orders, sources told Economic Times. Assessments for tax year 2023–24 must be completed before the end of the current financial year.
The funds have been asked to provide information on sources of capital, bank account signatories, directors’ roles, ultimate beneficial ownership, operating expenses, and the nature of their presence in Mauritius and Singapore. They must also disclose details of buyers, including whether any transactions involved related parties.
“The scope and depth of these inquiries suggest a clear intent to extend the principles emerging from the Tiger Global ruling to a broad range of previously accepted Mauritius holding and fund structures,” said Parul Jain, head of international tax at Nishith Desai Associates. She noted that authorities may invoke judicial anti-avoidance principles and escalate certain cases to the GAAR panel. GAAR — the General Anti-Avoidance Rule — was introduced to curb aggressive tax planning.
Jain also cautioned that with the department seeking information about transaction counterparties, parallel proceedings against buyers for alleged failure to withhold taxes cannot be ruled out.
Click here to add News18 as your preferred news source on Google. February 11, 2026, 08:16 IST
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