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TMI BlogSTATEMENT OF THE FINANCE MINISTER on GAARX X X X Extracts X X X X X X X X Extracts X X X X ..... l exploitation of tax laws to one's own advantage and an arrangement entered into solely or primarily for the purpose of obtaining a tax advantage. 2. The principle of GAAR was incorporated in the Direct Taxes Code which was introduced as a Bill in Parliament on August 30, 2010. 3. Pending consideration of the Bill, the Income-tax Act, 1961 was amended by Finance Bill, 2012 to add Chapter X-A ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmittee submitted its draft report on August 31, 2012 which was placed in the public domain on September 1, 2012. After examining the responses to the draft, the Expert Committee submitted its final report on September 30, 2012. 6. The Government has carefully considered the report of the Expert Committee. 7. The major recommendations of the Expert Committee have been accepted, with some modific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a 'connected person'. (v) The Approving Panel shall consist of a Chairperson who is or has been a Judge of a High Court; one Member of the Indian Revenue Service not below the rank of Chief Commissioner of Income-tax; and one Member who shall be an academic or scholar having special knowledge of matters such as direct taxes, business accounts and international trade practices. The current provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rmissible avoidance arrangement, it will be ensured that the same income is not taxed twice in the hands of the same tax payer in the same year or in different assessment years. (ix) Investments made before August 30, 2010, the date of introduction of the Direct Taxes Code, Bill, 2010, will be grandfathered. (x) GAAR will not apply to such FIIs that choose not to take any benefit under an agreem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various authorities under GAAR. (xvi) Section 245N(a)(iv) that provides for an advance ruling by the Authority for Advance Rulings (AAR) whether an arrangement is an impermissible avoidance arrangement will be retained and the administration of the AAR will be strengthened. (xvii) The tax auditor will be required to report any tax avoidance arrangement. 8. Further, having considered all the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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