Mauritius is ready to dispel India's concerns over the possibility of misuse of double taxation avoidance agreement by plugging any existing loopholes, Mauritius Minister of Foreign Affairs (Regional Integration & International Trade) Arvin Boolell said.

Mauritius is still waiting for India's response to a proposal that the island country had made at the last Joint Working Group meeting in March this year, for an amendment in the double taxation agreement between the two countries.

Mauritius had submitted a proposal to insert limitation of benefit clause in the agreement to ensure that only genuine investors from Mauritius enjoy tax benefits in India.

Speaking on the topic, Boolell said, "Whatever loopholes are to be plugged, our prime minister has said we are willing to plug them. We have put in place all necessary precautions, all necessary checks and balances..."

Boolell also discussed the matter with India's Commerce & Industry Minister Anand Sharma, who was in the island nation to attend Indian Ocean Rim Association for Regional Co-operation conference.

The existing tax treaty's article 13 states that capital gains arising in India from investments from Mauritius into India can be taxed only in Mauritius. But, as Mauritius doesn't tax capital gains, many investors unduly make use of the condition to escape capital gains tax.

More than 40 pet cent of the foreign direct investment (FDI) that India received after opening various sectors to foreign investors are from Mauritius.