GAAR postponed to 2016, will be applicable if tax benefit exceeds 3 crore

0 comments Monday, January 14, 2013

Implementation of GAAR i.e General Anti Avoidance Rules has been postponed to 2016 and will be applicable w.e.f. 1st April, 2016. A press release has been issued in this regard by Ministry of Finance on 14-01-2013. The major recommendations of the Expert Committee have been accepted, with some modifications.

Now under new GAAR  An arrangement, the main purpose of which is to obtain a tax benefit, would be considered as an impermissible avoidance arrangement, whereas the current provision prescribes that it should be “the main purpose or one of the main purposes”.

A monetary threshold of Rs. 3 crore of tax benefit in the arrangement will be provided in order to attract the provisions of GAAR.
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