Budget 2017 will not postpone GAAR

GAAR would apply to any tax avoidance arrangement where aggregate tax benefit exceeds Rs 3 crore

The coming Budget will not postpone the General Anti-Avoidance Rule (GAAR) provisions, which will apply from the financial year 2017-18. 

In fact, an increase in the threshold limit under GAAR could be proposed. Under the current Income tax (I-T) rules, GAAR would apply to any tax avoidance arrangement where the aggregate tax benefit received by all the parties involved is in excess of Rs 3 crore. 

Further, the I-T rules were amended in June last year so that GAAR would not apply to income earned or received by any person from any transfer of investments made before April 1, 2017. However, it should be noted that only income from transfer of investments, and not any other tax planning arrangement, is covered.

Stakeholders are concerned over the fact that GAAR will override provisions of tax treaties entered into between India and various other countries, reported The Times of India.