Govt amends tax treaty with France, revises dividend tax structure

India has amended ​its tax treaty with ​France and removed the ‌most-favoured-nation clause, the finance ministry said on Monday.

The government said it has also modified how it taxes dividend income, replacing the existing flat 10 per cent rate ‌with a split structure.

Under the revised framework, dividend income will now be taxed at 5 per cent for shareholders holding at least 10 per cent ​of a company's capital and at 15 per cent ‌for all other investors.

Reuters reported ​on ‌December 12 that India and France ‌have struck a deal to revise ‌their 1992 treaty ​to halve ​the tax on dividends paid by Indian units ‌to ​French parents.