General Anti Avoidance Rule (GAAR) will be effective from april 1 , 2017

The Union Finance Ministry recently updated the fact that the General Anti Avoidance Rule (GAAR)  will be most probably effective from 1 april ,2017 from the Assessment year 2018-2019 , in other words financial year 2017-2018.
The application of GAAR under which  the terms , condition and needed procedures have been enumerated of the income tax department rules , 1962 in the rules 10U to 10UC.

A slew of clarifications on implementation of the General Anti Avoidance Rule (GAAR) has been issued seeking to mention the concerns of  foreign investors for the implementation of the anti-evasion measure from the Income Tax (IT) department.


You all till now must have understood the full name of the word "GAAR" . But must be awaitng to know what is actually GAAR is?
Therefore , the content below will help you all to understand it better and wisely.

What is general Anti Avoidance Rule?

GAAR stands for General Anti - Avoidence Rule that is an Anti- Avoidence rule in India to be effective from 1st april , 2017.  

GAAR  is establish by the department of Revenue under the Ministry of  Finance (MOF) .

GAAR was originally proposed in 2009 direct taxe code that were basically targeted at transactions to avoid the taxes. At that time , pranab mukherjee was the finance minister who further introduced this rule to the budget of 2012.

AIM of General Anti - Avoidence Rule (GAAR)-

GAAR prevents the companies from routing or making transactions through other nations or countries to basically avoid taxes. The Rules of GAARS are formed to mainly minimize the avoidence of taxes also it keeps an eye on taxes avoidence.

Clarifications of GAAR :-

• GAAR will not apply , if the jurisdiction of FPI is finalized that will based on non-tax commercial implementation   also the main purpose of this arrangement is to not to gain tax benefit.
• GAAR will also not interplay with the right of taxpayer to choose a method of making transactions.
• GAAR will also not apply in cases like , if court has adequately considered the tax implications.
• If an arrangement is held as permissible for the advance ruling of the authority , GAAR will not pe applicable to such cases.