NEW DELHI: India has amended its over two-decade old tax treaty with Singapore that will allow it to tax capital gains on investments from the South East Asian nation, a significant milestone in plugging round-tripping of funds after changes to treaties with Mauritius and Cyprus “This year on May 10 we had amended DTAA (double taxation avoidance agreement) with Mauritius. Then in September we amended with Cyprus and today we amended the DTAA with Singapore," finance minister Arun Jaitley told reporters in Friday."With these three... we have successfully stopped round tripping through this route,” he said. The reworked treaty brings the treaty on par with that with Mauritius providing for taxation of investment in shares of Indian companies as per local rule from April 1, 2017.Short-term capital gains in India face tax at the rate of 15% while there is an exemption for long-term gains.For shares acquired on or after 1 April 2017, there will be a two-year transition period, during which the capital gains from such shares will be taxed at 50% of India’s domestic tax rate if the capital gains arise during 1 April 2017 to 31 March 2019. Jaitley said the earlier DTAAs with the three countries gave complete exemption from payment of tax on profits made through capital gains as there was no such levy in the host countries. The beneficiary did not pay any capital gains tax in India."Therefore there was a reasonable apprehension that these agreements were misused for round tripping and bringing money back in country through this route," he said, adding 2016 has been significant and historic in getting these amended. Through the revision in the treaty, "we have given a reasonable burial to the black money rule that existed," he said.He said like the Mauritius pact, all investments will be grandfathered till March 2019. "Capital gains liability will be shared half and half and after that entire capital gain will come to India," he said. Besides, he said, Switzerland will begin sharing with India from 2019 information on all investment or accounts maintained in its banks post-2018.The Central Board of Direct Taxes had signed an agreement to this effect with Switzerland about two months back, he said. These are "milestone in campaign against tax evasion and parking of money outside country," he said. "2016 has been historic as three DTAAs have been rewritten."Jaitley said, "The revisiting of these arrangements was extremely important and along with the battle of black money that is being fought currently in India, it is a very happy coincidence that by amending them, we have been able to give a reasonable burial to this black money route which existed".A statement from Singapore government said the updated DTAA preserves the existing tax exemption on capital gains for shares acquired before 1April 2017, while providing a transitional arrangement for shares acquired on or after 1 April 2017. Singapore is the second-biggest source for foreign direct investment (FDI) into India after Mauritius, accounting for over 16% of cumulative inflows so far. Tax experts say the changes to agreement follow the template laid down in the amended India-Mauritius tax treaty.