General Anti-Avoidance Rules is a tool of government which prevent the practice of tax evasion....................
Indian Government is trying to give powers to income tax authorities as implementation of GAAR provides tremendous powers to deny tax benefit to an entity if a transaction has been carried with the sole intention of tax avoidance. Due to powers in the hand of taxmen, now innocents may be harassed by them.
FII & FDI money coming to India through Mauritius route will now become taxable.
Increased litigations.
To make it easier to understand GAAR; we can say that suppose a person or a company is setting up business in Gulf Country and its clear intention is to claim exemption from capital gains tax, in such a scenario Indian govt has the right to deny the legitimate claim for exemption provided under DTAA as it falls under tax avoidance and Indian govt is trying to plug the loopholes.
Foreign investors may be relieved over the controversial gaar tax proposals being pushed back by a year but another new taxation framework could make their India investments riskier and expensive.
The proposals that are a part of the Finance Bill. They state that capital gains arising from the transfer of shares or interest in a non-Indian company -- in case the share or interest derives directly or indirectly its value substantially from assets located in India -- will be taxable in the country.
To make it easier to understand GAAR; we can say that suppose a person or a company is setting up business in Gulf Country and its clear intention is to claim exemption from capital gains tax, in such a scenario Indian govt has the right to deny the legitimate claim for exemption provided under DTAA as it falls under tax avoidance and Indian govt is trying to plug the loopholes.
Foreign investors may be relieved over the controversial gaar tax proposals being pushed back by a year but another new taxation framework could make their India investments riskier and expensive.
The proposals that are a part of the Finance Bill. They state that capital gains arising from the transfer of shares or interest in a non-Indian company -- in case the share or interest derives directly or indirectly its value substantially from assets located in India -- will be taxable in the country.
by
ajay kumar
ajay.mrim@gmail.com
No comments:
Post a Comment