Tax is a financial charge imposed on citizens so as to fund the public expenditures. Most people adopt/implement various strategies to get rid of the taxes. To make them pay tax, the government is planning to invoke GAAR (General Anti-Avoidance Rule), which was proposed by the former Finance Minister and current President of India Pranab Mukherjee during the Budget session of 2012, from April 2017. Here we've presented a few provisions that we can expect in the implementation of GAAR.
GAAR could be invoked on the tax avoidance arrangement(s) that assessee above a certain amount (as specified) over a year.
GAAR will be invoked on the income that is accumulated by the individuals on or after April 2017.
GAAR applies on the transactions that are not covered under SAARs (Specific Anti-Avoidance Rules).
CBDT (Central Board of Direct Taxes) will provide the secretariat staff (headed by Joint/Additional Commissioner level of Income Tax Department), budgetary and infrastructure to the three-member Approving Panel, one Joint Secretary or above from the Ministry of Law and two Chief Commissioners from the Income Tax Department, situated at Delhi.
Based on the workload CBDT will review the number of Approving Panels required to implement GAAR.
Even there are mixed opinions regarding GAAR, we hope the Modi government will succeeded in implementing from next April 2017.