India-Maldives DTA of air transport income approved: Cabinet

The central government on Wednesday approved an agreement for avoidance of double taxation of income from international air transport between India and Maldives.

The agreement, which was approved at a cabinet meeting chaired by Prime Minister Narendra Modi, provides relief from double taxation to airline enterprises of both India and Maldives.

"The agreement provides for relief from double taxation for airline enterprises of India and Maldives by way of exemption of income derived by the enterprise of India from the operation of aircraft in international traffic, from Maldivian tax and vice-versa," an official statement said.

"Under the agreement, profits from the operation of aircraft in international traffic will be taxed in one country alone."

The statement elaborated that the taxing rights under the agreement has been conferred upon the country to which the enterprise belongs.

"The agreement will provide tax certainty for airline enterprises of India and Maldives," the statement added.

"The agreement further provides for mutual agreement procedure for resolving any difficulties or doubts arising as to the interpretation or application of the agreement."