GAAR to be finalised after PM's approval

The draft guidelines seek to address concerns of investors over misuse of tax proposal

Within 24 hours of Finance Ministry issuing the draft guidelines on controversial General Anti-Avoidance Tax Rules (GAAR), the PMO appears to have distanced itself from the proposal saying that they were not seen by Prime Minister Manmohan Singh and would be finalised only after his approval.

"These (draft guidelines) have not been seen by the Prime Minister and will be finalised with the approval of the Prime Minister, who holds the Finance portfolio, only after considering the feedback received", Prime Minister's Office (PMO) said in a release.

The Finance Ministry last evening had issued draft guidelines on GAAR - a budgetary proposal to check tax evasion - to seek feed back of the stake holders.

 

The draft guidelines seek to address the concerns of the investors over misuse of the tax proposal. Besides other things, it said that there would be a threshold limit for invocation of GAAR and it would apply on income accruing after April 1, 2013.

In view of the widespread protest against the proposal, former Finance Minister Pranab Mukherjee postponed its implementation by a year to April 2013.