A new tax Circular provides guidance on how Principal Purpose Test provisions apply in the context of India's tax treaties with other countries.The Circular is a welcome development as it offers some certainty on tax implications that could affect foreign investors who have invested in India.  Executive summaryOn 21 January 2025, India tax administration's Central Board of Direct Taxes (CBDT) issued a Circular1 providing guidance on application of the Principal Purpose Test (PPT) provisions in the context of Indian tax treaties.Broadly, the Circular clarifies that PPT provisions would apply prospectively from (i) the date of entry into force of the...