ARTICLE 24
Limitation on Benefits
1. A person (other than an individual) which is a resident
of a Contracting state and derives income from the other
Contracting state shall be entitled under this Convention to
relief from taxation in that other Contracting state only if:
a) more than 50 percent of the beneficial interest in
such person (or in the case of a company, more than 50
percent of the number of shares of each class of the
company’s shares) is owned, directly or indirectly, by one or
more individual residents of one of the Contracting States,
one of the Contracting States or its political subdivisions
or local authorities, or other individuals subject to tax in
either Contracting State on their worldwide incomes, or
citizens of the United States; and
b) the income of such person is not used in substantial
part, directly or indirectly, to meet liabilities (including
liabilities for interest or royalties) to persons who are not
residents of one of the Contracting States, one of the
Contracting States or its political subdivisions or local
authorities, or citizens of the United States.
2. The provisions of paragraph 1 shall not apply if the
income derived from the other Contracting state is derived in
connection with, or is incidental to, the active conduct by such
person of a trade or business in the first-mentioned state (other
than the business of making or managing investments, unless these
activities are banking or insurance activities carried on by a
bank or insurance company).
3. The provisions of paragraph 1 shall not apply if the
person deriving the income is a company which is a resident of a
Contracting state in whose principal class of shares there is
substantial and regular trading on a recognized stock exchange.
For purposes of the preceding sentence, the term "recognized
stock exchange" means:
a) in the case of the United States, the NASDAQ System
owned by the National Association of Securities Dealers,
Inc. and any stock exchange registered with the Securities
and Exchange Commission as a national securities exchange
for purposes of the Securities Act of 1934;
b) in the case of India, any stock exchange which is
recognized by the Central Government under the Securities
Contracts Regulation Act, 1956; and
c) any other stock exchange agreed upon by the
competent authorities of the Contracting States.
4. A person that is not entitled to the benefits of this
Convention pursuant to the provisions of the preceding paragraphs
of this Article may, nevertheless, be granted the benefits of the
Convention if the competent authority of the state in which the
income in question arises so determines.