GAAR will be effective April 1, 2017

GAAR will be effective April 1, 2017
January 30, 2017

Addressing investors’ concerns ahead of GAAR implementation from April 1, the tax department said it will not interplay with their right to choose a method of transaction and won’t apply if routing of funds through a jurisdiction is “based on non-tax commercial considerations”.
The General Anti-Avoidance Rules (GAAR), which seek to prevent companies from routing transactions through other countries to avoid taxes, can be invoked through a two-stage process involving a nod at the level of principal commissioner of income tax and a panel headed by a high court judge.
Seeking to assuage concerns of investors, CBDT said GAAR provisions shall be effective from the assessment year 2018-19 onwards and “shall not be invoked merely on the ground that the entity is located in a tax efficient juridiction.

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