New Delhi, Jan. 15 -- In a setback to Tiger Global Management Llc, the Supreme Court on Thursday upheld the income tax department's claim that capital gains arising from the US-based investor's $1.6-billion exit from Flipkart in 2018 are taxable in India.

The top court set aside the August 2024 judgment of the Delhi high court, which had earlier quashed the tax demand and held in favour of Tiger Global.

The judgment pronounced by a bench of Justices J.B. Pardiwala and R. Mahadevan will potentially change how India taxes foreign investors and how it reads its most important tax treaty, the India-Mauritius Double Taxation Avoidance Agreement (DTAA).

At the centre of the dispute was Tiger Global's $1.6-billion exit from Flipkart in 2018, ...