NEW DELHI: The Union Cabinet today gave its approval for signing of an agreement between India and Maldives that will provide relief from double taxation for their airlines operating between the two countries. 

"The agreement provides for relief from double taxation for airline enterprises of India and Maldives by way of exemption of income derived by the enterprise of India from the operation of aircraft in international traffic, from Maldivian tax and vice-versa," an official releas said. 

Under the pact, profits from the operation of aircraft in international traffic will be taxed in one country alone. 

Accordingly, the taxing right is conferred upon the country to which the enterprise belongs. The Agreement will provide tax certainty for airline enterprises of India and Maldives, it added. 

The pact further provides for a mutual agreement procedure for resolving any difficulties or doubts arising as to the interpretation or application of the pact.