Article 13 - Capital Gains
Article 13 allocates taxing rights over capital gains between India and Canada.
India-Canada: Corrected 2026-09-04: Article 13 is not share-specific or India-specific - paragraph 2 is a blanket rule that "gains from the alienation of any property, other than [ships/aircraft], may be taxed in both Contracting States," covering essentially all property, not just shares of Indian companies.
Indian domestic law: Capital gains computation follows Section 67 et seq. of the IT Act 2025 (formerly Section 45 et seq. of the 1961 Act). Even where the treaty assigns taxing rights to the State of residence, India retains rights over gains on shares of an Indian company under certain anti-abuse rules (e.g. Sections 178-184 GAAR, indirect-transfer provisions under Section 9).
MLI impact: The Multilateral Instrument has tightened the rules on indirect-share-transfer gains. Where the value of foreign shares is derived principally from Indian immovable property at any time in the 365 days before transfer, India retains source rights.