GAAR: Updates


SHARETIPSINFO >>Research Reports >>GAAR – From 1st April 2016>> (27-09-2013)


Government t Notification on GAAR:
Finally after much of debate Government notified GAAR will be implemented from 1st April 2013.

Fine points of GAAR: GAAR (General Anti Avoidance Rules)
- GAAR to come into effect from April 1, 2016
- General Anti Avoidance Rules (GAAR) will apply to entities availing tax benefit of at least Rs 3 crore.
- Investments made by a non-resident by way of offshore derivative instruments or P-Notes through FIIs, will not be covered by the GAAR provisions.
- It will apply to foreign institutional investors (FIIs) that have claimed benefits under any Double Tax Avoidance Agreement (DTAA).
- Investments made before August 30, 2010, will not be scrutinized under GAAR,
- The provisions will apply to assesses that obtain tax benefits on or after April 1, 2015.

IMPACT on the Market:
Market will take it positively. The GAAR is not applicable from the retrospective effect. Also that P-Notes and offshore derivative instrument is not touched will keep foreign investors happy. It will be applicable to only those FIIs that have claimed benefit under DTAA.
We feel market will give thumbs up to this move.


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