Govt postpones GAAR implementation by 2 years to 2016
- Spot-fixing: Chandila was in touch with four sets of bookies, says Delhi Police
- Chinese Premier Li Keqiang arrives, to hold talks with PM on boundary, water issues
- IPL 2013: Delhi Daredevils crash to defeat, finish last
- Jaganmohan's wife attacks CBI, accuses it of working at Congress behest
- Blast accused death: UP govt seeks CBI probe, FIR against 42 persons
Giving a big relief to overseas investors, the government has postponed implementation of controversial GAAR provisions by two years to April 1, 2016.
"Having considered all the circumstances and relevant factors, the government has ...decided that provisions of Chapter 10A of the Income Tax Act (dealing with GAAR) will come into force from April 1, 2016 as against April 1, 2014,"
Finance Minister P Chidambaram said here today.
The General Anti Avoidance Rules (GAAR) provisions, introduced by the then Finance Minister Pranab Mukherjee in the Budget 2012-13, were aimed at checking tax avoidance by overseas investors. The proposal, however, generated controversy, with investors expressing apprehensions that it would result in unnecessary harassment by tax authorities.
The decision to postpone the implementation, Chidambaram said, follows the recommendations of the Shome Committee which was set up by Prime Minister Manmohan Singh in July last year to look into investor concerns.
The government, Chidambaram further said, has accepted major recommendations of the panel with some modifications.
"The modifications that we have done are fair, non-discriminatory, just and strike a balance between interest of revenue and interest of investors. So, all apprehensions should now be set addressed," he said.
The GAAR provisions, the Minister also clarified, would override the double taxation avoidance agreement (DTAA) benefits if the arrangements were intended solely to evade taxes.
No investor, Chidambaram said, "should now have any apprehension about his investments in India. Only those arrangements, which have been made for the purpose of tax avoidance, will be brought under GAAR, he added.
He also clarified that investments made by Non-Resident Indians (NRIs) will not be covered by the provisions of GAAR.
Following the announcement, the BSE benchmark Sensex rose by about 200 points to 19,864.
About the applicability of the GAAR provisions, he said FII investments seeking benefits under Sec 90 and Sec 90 (A) of the I-T Act (dealing with DTAA) would be covered.
- Former Ranji player among 3 more held
- Rajasthan Royals to file FIR against tainted trio
- If found guilty, BCCI to ask ICC to erase Sreesanth records
- Top cops among 42 named in death of blast accused
- PM takes tough line on incursion issue
- Security forces blame Maoists, villagers say CoBRA man was killed in ‘friendly fire’