Govt defers GAAR implementation to 2016
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.
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.