TNI Bureau: In a huge relief to foreign investors, the government has deferred the implementation of the GAAR (General Anti Avoidance Rules), anti-tax avoidance provisions, to 2016. Analysing the current situation, Finance minister P Chidambaram said that the provisions of Chapter 10A of the Income Tax Act, which was scheduled from April 1, 2014, will come into effect from April 1, 2016.
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The GAAR, which was introduced by the then finance minister Pranab Mukherjee in the Budget 2012-13, were aimed at checking tax avoidance by overseas investors. However, the investors had expressed disappointment over the proposal, saying it would result in harassment by the I-T authorities.
The decision to defer the implementation of the proposal came after the recommendations of the Shome Committee, set up by the Prime Minister Manmohan Singh in July 2012.