GAAR implementation deferred by 2 yrs till April 2016

The government has deferred implementation of the General Anti-Avoidance Rules (GAAR) by two years.The rules were to come into effect from 2013-14 financial year, but the Parthasarathi Shome Committee had recommended putting it off by three years.

The information was given by Finance Minister P Chidambaram to reporters here today.

Now, it will come into effect from 2015-16 financial year or 2016-17 assessment year.

The draft rules of GAAR, circulated by the Central Board of Direct Taxes, had drawn flak from various quarters for scaring investors.

GAAR basically applies to those arrangements whose main purpose is to avoid taxes and rather than commerical.

The Shome Committee's final recommendations are with the Prime Minister's office.