The Union Finance Ministry has announced that the General Anti Avoidance Rule (GAAR) will be effective from the 1 April, 2017. In this regard Income Tax (IT) department has issued a slew of clarifications on implementation of GAAR, seeking to address concerns of foreign investors over implementation of the anti-evasion measure. GAAR seeks to prevent companies from routing transactions through other countries to avoid taxes. The rules are framed mainly to minimize and check avoidance of tax.
India will be the 17th nation in the world to have laws that aim to close tax loopholes. At present, GAAR is in force in nations like Australia, Singapore, China and the UK.
So, let’s discuss some questions related to this post:
Q1. What is the Full Form of GAAR?
Ans1. General Anti Avoidance Rule