The India-Mauritius Double Taxation Avoidance Convention, DTAC, is to be reviewed to incorporate appropriate changes to prevent the abuse of the treaty. The mechanism for exchange of information on tax matters between India and Mauritius is to be further strengthened. Finance Minister P. Chidambaram gave this information in the Lok Sabha today. Elaborating the proposed measure, he said capital gains is fully exempt from taxation in Mauritius under their existing law. Thus an investor routing his investments through Mauritius into India does not pay capital gains tax either in India or in Mauritius. As a result, Mauritius has become an attractive route for investment by third country residents into India through treaty abuse. Mr. Chidambaram recalled that the existing Double Taxation Avoidance Convention between India and Mauritius was notified in 1983. It provides for taxation of capital gains arising from alienation of shares only in the country of residence of the investor.